Have A Question!!!!!!!!!!!!!
I have come in contact with an older couple who are currently in foreclosure and the property is due to be sold on the 7/27. This is a 3 unit building with a first mortgage judgement of $141,000 and a 2nd mort. of $28,000. The building needs a lot of work. I'm estimating about $50,000 - $60,000 worth. The ARV would be appr. $250,000. However, I just found out that they are in a chapter 13 bankruptcy. Is there still a deal in this property? Initially, I was thinking short sell due to all the work that needs to be done. Because of the Bankruptcy this is not an option. Or is it? How should I proceed?
Unless you're educated in dealing with properties in bankruptcy I would look for another deal. I had a similar deal in the works until the seller dropped the bankruptcy bomb on me. Maybe you can pick it up at auction.
I am not a bankruptcy expert.
Did they file Chapter 13 after the foreclosure started? Was the property included in their Chapter 13 bankruptcy filing? If it was included, was it then later released from the bankruptcy? The answer to these questions will determine if the bank can foreclose. If the bank can foreclose, then you can short sell.
What is the appraised value of the property? Is there any equity? Do the owners live at the property? If there is no equity and the payment is a burden (which of course it would be, especially if it is an investment property) then the bankruptcy trustee should agree to release it from the bankruptcy (if it was part of the bankruptcy and not already released) so that it could be sold.
Chapter 13 gives the person time to restructure and payoff their debts under a payment plan. Something like 75% of all chapter 13 payment plans fail. So stay in contact with the owner and let them know that you are always willing to help relieve them of that burden.
Brenda
No, they did not file bankruptcy after the foreclosure was initiated. They filed in '02. Their sole purpose was to save the building. To my knowledge it has not been released from the chapter 13. They have fallen behind on their payments due to a tenant who has stopped paying rent. Nevertheless, they're in a chapter 13, fallen behind and the lender is going to foreclose.
The appraised value is approximately $150,000. The owners do live in the property.
What is the time frame on a Short Sale? Is there enough time to conduct a short sale if the property is released from the bankruptcy? Again, the foreclosure date is 7/27/04. Can this date be extended by the lender pending a short sale? Or is it best to wait until the property forecloses and is bought back by the lender(REO)? Then make a low offer to the lender. I'm thinking this is riskier with other investors/rehabers waiting on the sideline.
if you're in SS negotiation the lender should postpone the house.
Is the hous and mortgage is part of the bankruptcy, the BK need to be resolved before anything else.
Why not see if the want to do SS inside BK?