Motivated Seller In Bankruptcy!!!!

Hello, this is my first message.

I have a client willing to walk away from her home, so she is very motivated! She filed for Chapter 13 but has since converted to Chapter 7 because she was unable to handle the new payment schedule.

Here is the problem! The ARV of the home is around 230 - 240K (got the comps). The repairs as I see them are $10 - 15K.

The first is for $170K, second $15K and third for 8K.

I have the "Authorization to Release Information" form signed and will get the "Contract for Deed" tomorrow when I can get to a notary with the client.

I am looking for any possible suggestions on how I should move forward with this client. Any help would be greatly appreicated.

Thanks Lee oh oh

Comments(8)

  • creativefinancer20th June, 2003

    Lee,
    What is the problem again, I mean what are you wanting suggestions on?

  • tree20th June, 2003

    Were I you , the first place I would drop by after getting her signature notorized would be the sign shop and have several nice signs made reading "Lease With Option to Buy, NO QUALIFING" .Lease at near fair market value ,3 year lease with 7% cash option fee. Go for it!

  • pbodys20th June, 2003

    Hey ltroyjohns, Welcome aboard

    Sounds like you have the makings of a good deal here.

    Total payoff $193k
    $10-15k in repairs = $203-208k
    ARV = $230-240k

    Here's an option:
    (After you make sure there are no other liens against the prop. or arrears)

    Put the deed in a trust, record the trust.
    See if the seller will leave the loan in place,
    spend about $4-500 bucks here...> Give the house curb appeal, throw some half emptied paint cans around along with drop cloths.

    If the bathroom needs repairs, just pull out the tub and lay some cloths around in there. Try to make it look like the house is being refurbished/rehabbed/remodeled and offer about $220k discounted because the repairs needed, get 4% down = $8,800, raise the rate a couple of points, enjoy a nice monthly spread and get paid on the end when the owners re-fi...whoops, gotta go....being bombarded here with motivated sellers.....my phones ringing every 1/2 hour!

    Hope this helps,
    Clif

  • DavidV20th June, 2003

    He Clif,
    How do you get your phone to ring every 1/2 hour. Whats your secret?

    Thanks
    David

  • JohnLocke20th June, 2003

    ltroyjohns,

    Glad to meet you.

    You say this lady is in Chapter 7, in a Federal Bankruptcy court is this correct?

    Now, I am sure you had the property released from the bankruptcy by the Bankruptcy Court Trustee. Because if you did not and something comes up as to why the lady transferred property to you while the property was under under the protection of Federal Bankruptcy Court Trustee you might be asked some questions.

    Of course if this is already cleared with the Trustee, then I see know problem with you doing all the due diligence and finding out if this property is suitable for your investing method.

    John $Cash$ Locke

  • verbatim20th February, 2004

    John, if their is equity in the home, how difficult is it to to get trustee to release it?

    I am going through something similar i posted about.

    http://www.thecreativeinvestor.com/ViewTopic22484-18.html

    Verb[ Edited by verbatim on Date 02/20/2004 ]

  • Tedjr20th February, 2004

    Homestead may be claimed as exempt in a Chapter 7 and the stay will be lifted as a matter of law after a certain time period after any objections may be able to be filed. The home could have already been released or the case may have been dismissed too. You for sure need to make sure the court has released the property so that it may be sold

    Good LUCK and Thank You
    Hope this helps some
    Ted Jr

  • browndog1st March, 2004

    This is a good deal, but you have to know how to move around in bankruptcy. You're crazy to put out 207K for this house. You would lose your shirt. I look for deals like this all the time, and you should be able to make it happen for a lot less. Still, if you don't know what you are doing and take the property without permission from the federal court you will be in big trouble. If you want some help IM me and we'll see what we can do.

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