I Think I Got A Deal I Can Work With
The property will be auctioned off on July 20th and the owner is motivated to sell the porperty. He wants to live in the house so I was thinking of letting him rent/own the property after the deed transfers to me. He owes the bank around $54000 and im pretty sure the house around the area can sell for over $75000. If I do what I say I want to do should I offer him some cash upfront to transfer the deed to me? and what kind of contracts would I need to transfer the deed and contracts for rent/own? are there any sites that have these contracts or anything you guys prefer to use? PLEASE any help would be much appreciated
As a rule, it's generally not considered a good idea to rent it back to the person being foreclosed upon. What has changed in their life? Before they couldn't or wouldn't make a house payment. Once you take over what is different? Granted, there _are_ some circumstances, but it is the exception, not the rule.
Jeff
can anyone help a guy whos in alittle trouble please?[ Edited by choongie on Date 07/10/2004 ]
Okay from what I hear you found a property going to sheriff sale on July 20. The property is worth $75k and the owner owes $54k.
Everyone is correct that you should not let the owner stay in the property. If you do, a judge may give the house back to the homeower as the transaction is more like a loan than a property sale.
Enough about that---you still have a deal here. Here is what to do:
1. Figure out what the owner wants to walk away with from the property. This could be $10 or $1000 or $10,000. This number determines how cheaply you can buy the property. If you don't have all that cash to give the homeowner, talk him into holding a note. Once you can figure out what to give the homeowner, put the home under contract to purchase.
2. Next you have a couple of options. You can look into what it costs to reinstate the loan. You can bring the loan current and then take the prob subject to that mortgage and use that financing. The next option would be to go quick and find someone with all cash to purchase the property. You may be able to sell it to another investor for a quick buck.
If you've got cash to play with I would look into bringing the loan current and reinstating the loan. This would give you more time to sell the property.
If you've got even more cash to play with, pay off the whole $54k that the bank owes, and depending on how much the seller wants you can pay him cash or convince him to take a note.
This should answer your question, in a nutshell. If you have anything else just ask and someone here will respond.
GOOD LUCK
myfrogger,
thank you so much for your response. The only concern I now have is with the contract papers. Can I obtain these contract papers at a real estate office? and what about at the real estate lawyers office? or an abstracts maybe? and can I check with them to see if the paperworks been filled out correctly? please!!! this is the only real problem I've been having. Worrying about the paperwork. Help would be very greatful
Okay, no one else is going to say it, so I'll be the bad guy here.
choongie,
In simple terms, you're not ready to be doing a deal yet, period. At this point, if you manage to get one under contract, you will have likely paid too much or get into some other trouble (by being creative).
Nothing personal here, but you need to know what forms/contracts you'll need and how you are going to go about getting the deal closed BEFORE you actually go out and start making offers. All this requires is a little more REI education (either at the local library or your nearest REIA group).
Now, if you're determined to go on with this, I'd suggest that you immediately get into contact with an agency that normally performs closings in your state (ie an attorney or title company) and see if they can help you work thru this. You might even try to get a RE agent to help you thru the paperwork, though it will cost you some commission fees (education expense).
Roger
thanks everyone for the reply. i guess rajwarrior is giving me a reality check.
I've purchased couple of REI books and such, but none of them really seemed to help. Any product in this website that actually teaches in step-by-step how to invest in RE. Will in contain all the forms that I need and such?
Im going to try to reach the owner on monday to get some more info.
Thanks everyone again
Another take on this would be:
1) Obtain real estate books and educational info
2) Select an agent or two to work with and you will also obtain an education from an agent while talking and being shown properties. Even purchase your first deal with an agent that you like working with. You will learn terminology, contracts, title, and closing.
Cheryl Lopez