What Do You Think Of This Investment Strategy?
Once I locate someone who is headed to foreclosure and they have some good equity in their home and I figure out what their financial situation is exactly I would offer to bring their mortgage current if they sign the Warranty Deed over to me. Once the property is deeded to me they would continue to make monthly payments to me and then I turn around and make the payment to the mortgage company. After 12 months I write up a Contract for Deed and have them sign it and deed the property back over to them. Once this transaction is done I will have made my money back and more. I know this guy who just did this and what he did was pay the mortgage company $2000 to bring the mortgage current, then when he deeded the property back to them he pocketed $15000.[ Edited by Diesel350 on Date 03/10/2005 ]
Yeah, what I said earlier! lol
What you’re proposing sounds creative, but whether you decide it is wise or unwise risk-wise, in many jurisdictions it is illegal. It is called “equity stripping” or “predatory lending,” and involves an apparently illicit reconveyance, often (but not necessarily) by scammer "mortgage companies." I’m surprised you haven’t encountered this as a lender; it was a brouhaha about it within HUD and FHA recently that led them to revise some of their rules recently. More and more states and the feds are adopting laws against this, to wit:
http://www.revisor.leg.state.mn.us/stats/325N/17.html
and
http://www.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00001639----000-.html
Loon is absolutely correct. Regardless of the justification you have used to convince yourself otherwise, when the seller gets an attorney involved, their case in court will be predicated on those arguments, and you as the big, bad investor will lose the argument probably 9 times out of 10.
The advice you have received on this topic is top notch. The quality of it is not diminished by the fact that you disagree with it.
Good luck,
Jeff
find the owner, ask him if he wants to sell, sign a purchase and sale contract, have owner sign an authorization to release information, get a payoff and reinstatement amount from the lender (or from the foreclosing lawyer), contact the lender and ask when is the sell date and will they postpone for a preforeclosure sell, get a title search and title policy, get money, have a closing.
Brenda
wow that was the greatest explanation ever
thank you
The mortgage co. does not own the house. They hold a note to it. They cannot sell somebody elses house. You need to contact the owners of the house and negotiate with them. Why dont you knock on the door? Explain to them that you would like to buy it instead of letting it go to foreclosure. Tell them you can give them 1-2k in cash to "convey title to you".
bgross,
The funny thing is, is that i was thinking the same thing
"that is the best explanation i have ever heard yet so simple"
that was definetely a "right down to the point" explaination. now go do it.[ Edited by ZinOrganization on Date 03/09/2005 ]
Way ahead of you...but they moved out 6 months ago...right after they divorced....disconnected phone..no forwarding number nor address. I was hoping they might still get my letters and respond...but no such luck.
any other suggestions folks,
YzGuy[ Edited by YzGuy on Date 03/09/2005 ]
Do a skip trace to find out where they are now or who might know where they are. I f you want more specifics you can email or private message me
nice!!!good job. let me know how that turns out