Need pre-foreclosure help?
Property is valued at 180K, current loan balance is 135K, and defaulted amount is 14K. The owner is willing to accept 149K which is the total amount owed as the purchase price with one condition: he wants to stay in this house or lease it with an option to buy. Do you think this is such a good idea and if so, how would I structure this deal to make it work and profitable? Any comments would be appreciated. Thank you.. 
Hi Rochoco,
Have you asked the homeowner why they are behind in mortgage payments as of right now? In most cases, if they can't make a payment now, the won't be able to pay you rent later. With your homeowner being in foreclosure, he is not really in a postion to have bargaining power. You may tell him that if you were to buy it from him that your plans would be to sell it right away to an investor friend for a profit. The advantage to him is that you could stop the foreclosure, help save his credit, and maybe even offer him $500 - $1000 to get a new and fresh start. If he is not open to this, then he may not be flexible seller. If this is the case, go on to the next foreclosure, there are always lots! Hope this helps!
Be careful! Like the last post said, if they can't pay their mortgage payments, how are they going to pay rent?
I'd run the other way if they insist on this. I almost did this on one of my first deals and the guy didn't want to pay rent for the first 2 months, etc... HE DIDN'T HAVE ANY MONEY - that is why he was in default. You can't take over their problem without having the cash coming in.
Don't!
I wonder if anyone disagrees with me??
Be careful...check local laws. Where I'm from, you can lease (if you like to evict...see above) but if you lease option, the cash used to reinstate loan can be construed as a personal loan to the current homeowner by the courts. (wave goodbye to your money) Best advice: They move on or you move on.