Trying To Come Up With A Deal
Here's the situation: It's now 6 days before auction, owner has been out of the house since June. The house has been "winterized" (water heater drained, locks changed, power cut off, etc), since August.
House FMV is about 162k, with a total of 94k owing to payoff, 6k repairs. Found the owner, in a different state, many miles away. Called her this morning, and she first heard of the sale last friday (there may be a foreclosure notice issue also), but in any case, she will not even consider selling the house. She has retained an attorney, so I am guessing she will go banko before the sale. She repeated several times that she needs to find a way to borrow 8k to pay off the late fees.
I mentioned I would give her "a very attractive cash offer for her house", but before I could even start talking about any numbers, she hung up on me, reiterating that she does not want to sell.
Any ideas on how to make a deal out of this, or just let it die?
Thanks
Some people are stubborn. Let it be. There are millons of homes out there, and plenty of deals and lots of dollars. Don't sweat it.
Eric
Agreed!
If this woman will not even consider selling with $8K owed and 6 days out of auction, she is by definition an UNmotivated seller and therefore, the exact opposite of what you need to make this deal work.
Move on...
Hi bc1,
Based on the spread that you provided, you may want to get a money partner in line and buy this one at the auction. Be sure to run a title search on it first!
Best of Success!
BAMZ
Bamz is right on again.
Let the old Biddie hang herself and walk away with nothing but a lump in her throat as there are tons of deals out there.
Competition at the auction may be stiff here so I would probably find something a little closer to home.
C-
Thanks for the replies. I am going to try and buy at the auction, if she doesn't go banko. For any house that I buy at auction, I get a L&E from a title company, to make sure i know the skinny. Seems like deals with this kind of margin don't happen very often around here, so I'm not optimistic, but I'll be ready in case it does come up.
OK, Here's an update. She worked with an attorney to get the sale postponed to the end of the month, and It doesn't sound like he is reccomending BK. He actually showed up at the sale, which gave me an opportunity to talk about the situation, and get an idea of what she wants. Well, what she wants is to stay in the house, (she lives part time here, and part time out of state). I am going to propose two ideas:
1. An all cash offer, of say 121k. This doesn't keep her in the house, but maybe she has changed her mind.
2. Buying the house subject to the existing mortgage, (I haven't done one yet, so I will be testing the waters), and lease option the house back to her for about 125k. She will be able to keep the house, I will make money, everybody wins, right?
Thanks for any thoughts,
Kevin
NEVER do deals where you lease option or rent back to the owner so they can stay. I have heard people say this, and cannot understand it, though I do challenge anyone reading this to prove without a doubt that this is a great way to go if person wants to stay and not sell.
What makes you think you will get one payment from them if they are in foreclosure???? Think about it, they are in FORECLOSURE, which comes from circumstances, which comes from behavior, which comes from words, which comes from habitual images and thoughts in the prospect's mind (as any circumstances do for anyone), WHICH REQUIRES MUCH WORK TO CHANGE, which you cannot change yourself, as much as you might want to.
recipe for disaster. Perhaps private message DerrickAli (that is his username on this site) about loan mod/workout plan/forbearance plan as an alternative, where you can at least make some money, as opposed to none. He has some pretty creative methods if prospect cannot get the cash to pay for the workout plan, which most probably can't.
Not every foreclosure prospect will sell you their house, just the way it is.
Best of luck, Dave
Thanks for the reply Dave. I have heard not to lease or rent back to the owner. However, if they end up not paying the lease/rent, why not just evict them? I agree, it will not be pleasant, but if worse comes to worst, I've made a good bit of money, and tried to make a win/win. Am I missing something here?
Just one curious question ..
Say you buy the house at the auction. Now you have a house with the previous owner in it. There is a strong possibilty that she might not voluntarily move out. So how easy is will it be to evict her? and how much $$$ shoud you allow for that possibilty.
Thanks
Personally, I don't like to purchase at the actual auction. The bank wants to get what they owe on the house, plus any fees they have paid up to the foreclosure. If I can't get it before from the owner, I move on 9 out of 10 times.
[addsig]
I am looking to bid on one tomorrow at an auction since the owner seemed soooooo much in denial and will not open door, answer phone. Question is what is a "safe" number you will not exceed. For example only bid as high as 80% of house ? more less? What is a good margin? keeping in mind I might have to evict owner and who knows what damage he may cause before leaving.
Thanks