They All Want To Keep Their House.
Knocked on some doors today. Everybody tells me they want to keep their house. What would you say? (courthouse steps are a week away)
I was thinking about doing a lease-back. Buy the property subto and then lease -option it back to them. They've lived there anyway. Whatever damage is done, is done. Plus, if they don't pay the rent you can foreclose since they are now a tenant. Could end up costing more in time and money, but when everything is said and done, you still have the deed, right?
Make any sense? Ideas? Comments?
JohnCL
Hi John,
The best way that has worked for me is to be very candid with the owners. If they want to keep their house, ask them how they are going to make that happen. Where are they going to get the money to bring the payments current in a short amount of time. When they cant come up with an answer, I explain to them the Real Truths about what is going to happen to them in the near future. I also explain what an unpleasant experience it is to be evicted from their own home by the Sherrif.
Once you have their attention, offer them a couple solutions on how you can help. Your main objective should be to get them relocated. Depending on the potential dollars to be made, offer to pay for their moving truck, expenses and perhaps pay their first months rent.
Show them how you can help take the pain of this experience away. You'll have a friend for life!
Best of Success!
BAMZ
How often is someone willing to listen to you if you knock on there door? I have a sweetheart of a deal (on paper) and i'm just not sure how to go about it if I get a door slammed in my face. This would be my first deal and I guess the ice-breaker. Anyone have any advice on door knocking jitters?
gfinney,
Go knock on the doors of some deals you don't care about. You can get your jitters and mistakes ironed out before you hit the one you do care about.
JohnCL,
I agree with Bamz' advice. Also, I wold only leaseback to people who are losing their house due to circumstances that are truely beyond their control. (Death in the family, huge medical bills, etc.) If they are losing the house due to negligence, low income, etc they will likely not be able to keep up on rent either and just become a headache.
Everything that has been posted is true and of bearing on the case.
Yes I have let my heart rule my head. I have let people stay in the house after taking deed and catching up the back payments and repairing the roof. I believed their stories. Some of which were true.
I also found myself in the uneviable position of finding them new jobs, teaching them skills, intruding in their life patterns trying to straighten up severe social problems.
I think I have run a lot of inhouse therapy sessions for no money, trying to keep my ex home owner now tenant from killing himself, killing me, kick my cat and get in a fight with a local policeman.
While entertaining it is not very profitable. If I want to do therapy, I can book the days without ex tenants who have some very strange views on money in and money out.
I stopped one wife from taking to the streets to raise money. I got her a job, not much of a job but at least legit and she got to keep her clothes on which now that I look aback on it was a real blessing. Of course all my good work went for naught. She finaly left, taking the kitchen door with her. Just what she wants a kitchen door for I do not know.
But that is the life pattern of a hold over after foreclosure.
I would take the good advice. Do a proper closing and move them elsewhere.
Cheers, frustrated, Lucius
I like BMAZ advise. Lucius talked about keeping owner, now tenants, but that is off subject. The question was what do I say to everyone in foreclosure who tels me: "I want to keep my house".
I am newbie and would like to know are you talking to the homeowner on the porch or you invite yourself in and what exactly do you say? Isn't that traspassing and someone may shot you?
I don't know about what your state but here in Texas it ain't trespassing unless you post it. No sign then I'm fine. If I get to the door and they tell me to leave and I don't, then that is trespassing. You got to tell me before it is.
Mitchell
Back on Track:
The next words out of their mouth are "my lawyer will save me". My understanding is all most lawyers will do is help them file bankruptcy (for a fee, of course).
This being the case, why would they not go through with this to "keep their house". Particularly after talking with their charming, sweet, intelligent, and thoughtful (for a fee) lawyer?
JohnCl[ Edited by JohnCl on Date 02/25/2004 ]
Bottom line, you need a motivated seller.
Some seller won't be motivated, even when the sheriff is knocking (at) the door!!
There is one motivated seller for every 10 foreclosed owners...or so...
When they tell me, "they want to keep their
home" I tell them to hold onto my card and call me if they change their mind. Good Luck! & Next.
You cannot reason with these people in their state of mind.. How many door knockers preceded you and how many will follow?
MikeMo,
You need to read what Lufos wrote my friend...and read the last sentace that he wrote...I would take the good advice. Do a proper closing and move them elsewhere.
He advised against keeping the people in the house. Lufos does not write something unless he has something to say and I think if the majority of the people here read that post like his others, there is a message within everything he puts on this site. He has a way with words, that leaves one thinking about the lesson he put to them. I also live by the sam erule...I wont keep people in a house like that either. Not good practice and it could bite you in the butt if your not careful. There was a post a while back that talked about it and it cured me of wanting to help anyone like that again. Good luck!!
MikeMo,
I have never heard of it being called tresspasing to walk up to someone's door and engage them in conversation. I don't think any law enforcement official would either. I'm not sure what effect the "No Tresspasing" sign would have, but I would opt to not find out.
JohnCl
I know someone who, most of the time, lets the sellers stay in their homes. She deals with pretty houses, therefore you have someone who, typically takes care of their home, loves their home, and therefore it will need less repairs if they don't stay. Many times she finds, in this situation, is that now, these people are working again and trying to get back on track. She gets a new loan and sells their house back to them, at FMV. They are responsible for upkeep... Then she can evict them later if it doesn't work out. She also has enough cash at closing, she saves a years worth of payments so if it becomes vacant for a while, she can pay it. Sometimes, if she keeps the owners in the house, she even gives them a few thou after closing to help them out. She says don't knock on doors. She says look up their phone number, call them, and set up a time to visit and discuss their options.
Another thing I heard, but it is sort of harsh, is one investor that does lots of foreclosure deals, tells them if they won't sell to him, he will just buy it next week on the courthouse steps. Or when they say that their lawyer will save them, let them know that the mortgage company does not have to agree with the lawyer's plans and can still foreclose.
As far as your question on doorknocking, I don't know, and I think it is rude. Just my opinion.
The reality is that if you don't door knock you won't open yourself to all sources for deals. Only a very few people in foreclosure have their phone numbers listed, only a few people will call on the letter you send them, and only a few of them will ever take action to avoid foreclosure. In this business, just like any other, the best money is made by individuals who do what everybody else hates to do, which is door knock and talk to the homeowner face to face.
Your are right, unless it’s an investment property, all of them want to keep their homes. Leaseback is a viable solution, as well as the purchase. One thing I've learned in this business that if the homeowner is in complete denial and being unreasonable and there's no way in the world someone could sway their opinion (which is actually all emotions anyway) it is dumb to get in the deal with them. Even if you use your best sales talk and make them sign some papers during your first meeting, they will deceive and avoid you down the road to make it impossible to close that deal. It’s amazing how much time I've wasted with these kind of losers. Now if I see they're not willing to work with me after a good presentation I run, you just can't beat any sense into someone's head if there's no room for rational mind. I'd wish them good luck but they wouldn't know what to do with it!(From Glen Garry Glen Ross)
[ Edited by narasland on Date 02/26/2004 ][ Edited by narasland on Date 02/26/2004 ]
Here Here! Becki
Quote:
On 2004-02-26 02:12, paigejohnson wrote:
[I would first have to ask you. Can you speak as well as you can spell?
Being able to convey a good understanding of what the homeowners problem is the first obstacle.
First off, in your case, install a spellcheck on your laptop. This might
help you.
Paige
Paige,
Hmm, if you really want to be technical, the line that starts off with "Being able..." should read (and notice the punctuation):
"Being able to convey a good understanding of what the homeowner's problem is, is the first obstacle."
Plus, if you're standing at someone's door, who would you be "conveying" THEIR problems to? I would suggest you install a grammar checker.
Regardless, this is a good topic, so let's stick to real estate and quit bashing, please.
To piggyback on the original question, when someone says they have it under control, and you leave them with a business card, do you leave anything else, i.e. "free report on how to sell your home in X day"?
I started a thread a little while back about people filing for BK to avoid foreclosure. The main point I came back with is that it doesn't solve the foreclosure issue - it merely puts it on hold for a few months. Then they end up with a foreclosure AND the BK on their credit. They still lose the house and with those two whoppers on your credit report who in their right mind would rent to you?
Also, depending on your state laws you could loose the house in BK court depending on your states exemption laws in cases of BK.
So unless they are 150% sure they will be able to be back on their feet in a few months they are making a bad situation a lot lot worse.
Something to be aware of when letting homeowner stay in the house, and selling him an option to buy back the house at a big profit to you: At least one court decision has held that this practice was a disguised LOAN to the occupant, at an illegally high interest rate, and was therefore, USURY...and as such, the money collected had to be returned, the option was voided, and the person who took title to the house and tried to do the occupant a favor really got burned.
So most people experienced in the business would advise you NOT to let the old homeowner/occupant stay in the house as those deals often turn sour.
The bottom line: "The foreclosure owner is NEVER your tenant!"
Use our advice,
Eric & Rosa
[addsig]
Here's line that I like:
"Well Mr. Homeowner, I can understand that you want to stay in your home, but I'm sorry, our company policy is to not lease back homes to people whom we buy from. Unfortunately, a couple of bad apples had to ruin it for everyone:
I'm not saying that you would do this, however once we had a house where we let the seller stay and rent. He paid one month, and then never again. The eviction took 6 months, so since then, we've made it a company policy to not let people stay in their homes. If this doesn't work for you I understand, after that one incident, we made it a policy"
I just tell 'em like it is.
Them: Can I stay in the house?
Me: No.
Them: Why not?
Me: I don't do business that way. Sign here if you're...
If they have sufficient equity (at least 36%), there is a program that can help by doing an investor-backed refinance that puts the property in a trust which leases it back to them. They keep their interest write-off and property tax exemption status.
Obviously, they have to be able to make the payments, or the investor won't do the deal; and, of course, that would not serve them well, either.
If you wanted to be the investor, you would earn cash at closing, plus a spread every month, until they refinance the investor's loan. If you did not want to be the investor, you can partner with another investor or earn a referral fee.
PM me if you would like more information.