Is This Even Worth Pursuing...
I know a guy who is about to go into foreclosure on an 150K home that he bought just last year with little or nothing for a down payment.
So essentially there is NO equity to speak of. His payments are $1300 a month and is currently 3 months behind.
My first sense is to pass, but then I thought to ask the pros and see if they see something I do not..
By the way the area is pretty nice and should appreciate over time.
Thanks..
You might try a short sale or buying the note short. Who's the lender?
I can find out the lender information, but I have no idea what a "short sale" is or how I would even pursue that..
I read somewhere (I think on this website) if you are just starting out stay away from short sales, so I really have not familiarized my self with that approach..
I think SS are alot more straight forward that other approaches.
If the seller and the back like your terms, your done, else on to next one.
Need to know what it really will take to fix the place up.
From what I know of the property (just found out about it yesterday) there is NO work required. It is in livable/rentable condition now. The owner is just having problems keeping up with the loan.
So it sounds like if I find out the lender I can directly approach them with an offer of price and terms for the property.?
Again, excuse me for asking as I never did this before, but what would be typically an offer that a lender would accept based on what I have told you about the property (150K loan and value)
By the way, thanks guys for responding.
when buying the note short, do you make your offer to the bank contingent upon you finding a new buyer or how do you handle paying the bank for that note?
negotiate the note discount with the bank. execute a sales contract with the owner. proceed as a normal transaction and set both closings for the same time/date. at closing, the owner will deed the property to you, the lender will fund escrow, the old note is paid off with the funds from escrow, the previous mortgage is satisfied, a new mortgage is put on the property, escrow is disbursed however you see fit. do it all at the same time, then you can get a loan on the deal. i've done as many as four of these at a single closing before.
The situation you describe sounds like it would also be a good candidate for a lease option. Ask the owner if he would be willing to give you an option to purchase the home for what is owed on it in let's say five years. Then explain that you will lease his home for the intervening five years and make all of his payments. If the owner agrees, you go out and find a person who wants to "lease to own" the property. The new tenant will pay the rent on the property and pay you a nice up-front downpayment for the right to purchase the home at a substantially higher price than you have optioned it for in five years. For more detailed information you may want to check out the lease option forum. I like Peter Conti and David Finkel, two investors that have written extensively on lease option strategy. Hope this gives you some other ideas.
Why would some home owner want to lease his home to you to find someone to live in his house? Where would he live?