Will This Work????????
an investor posted this technique on our local real estate investors yahoo group, i have yet to hear about this technique, and i want to know if anyone else out there is doing this, or can someone advise me of any possible pitfalls.
the tech. involves preforeclosures with at least 10% equity. the likly candidate would be someone who ran into hard times missed a few payments and just cant make up the back payments, but now they can maintain the current payments. rather than facing foreclosure, they deed the property to you, you in turn refinance, pull some equity and leave some in reserves (future payments, holding and eviction costs if needed), then you sell it to the original owners on a 1yr lease option.
can this work??? i know the first thought is that if they didnt pay the bank why would they pay me. but if the original homeowners fail on their end, wouldnt i now own a house that i put no money into and stand in a position to evict the original homeowners?? if there is a flaw somewhere in here please explain.
Look at it this way, if you refi and cash some money out, leave that foryouself, and sell to them on a L/O If they don't pay, evict, and sell for more of a profit. I think its a good idea.
[addsig]
Yep, sounds like a good deal if you sell it back to them for a profit. Also, if there is a second on it, you can probably discount it and create a bigger profit.
, and see if the Loss Mit Rep will accept a Modification or Forbearance Agreement. That way, NO MONEY comes out of YOUR pocket. Get the Deed (I would shelter in a Land Trust so the bank won't know). And then do your Lease/Option back to them.
Even better, you should keep the current financing in THEIR name (subj to
Good luck.[ Edited by sgtphilko on Date 05/03/2004 ]