Might have found a great deal...little help? - Posted by Wayne

Posted by Wayne on July 13, 2006 at 12:25:40:

nfm

Might have found a great deal…little help? - Posted by Wayne

Posted by Wayne on July 13, 2006 at 12:05:55:

I think I may have a great deal here…Can someone explain a few things to a newb?

Property is in preforclosure. Default amount is ~10K, balance is ~120K, ARV is ~215K. The listing says sale date of 8/9. Any ideas on how I can purchase this property without going to auction?

Re: Might have found a great deal…little help? - Posted by Joe Kaiser

Posted by Joe Kaiser on July 14, 2006 at 03:09:19:

Ho hum . . .

This isn’t a deal at all, it’s merely a situation that happens all the time
to people struggling to keep up.

It becomes a potential deal when you’ve talked to the owners and
they’ve given you some indication they’re willing to work with you and
allow you to assist in solving their problem.

Don’t confuse a situation with a deal. It is extremely rare that a
situation actually turns into so deal. Situations, frankly, are a dime a
dozen and at this point, in all likelihood, you have nothing.

I’d say 5%, tops.

To purchase the property you simply reach an agreement with the
owners that is acceptable to the both of you. You learn what works for
them by contacting them to see if they’re in need of a hand, and you
attempt to assist them in a manner that “works” for them and puts a
little more than lunch money into your pocket as well.

Joe

Re: Might have found a great deal…little help? - Posted by The Big Kahuna

Posted by The Big Kahuna on July 13, 2006 at 20:21:11:

Here’s an idea I’ve heard others talk about.

  1. Can they borrow money from their parents, family, or any one else to bring the loan “current”? If so, borrow the money!

  2. If not, tell them they could get a Hard Money loan to pay off the arrearage and the balance of their loan.

Make sure their problem is a “short” versus “long” term problem. Otherwise, they’ll be in Default once more.

This allows them time to get their finances in order.

  1. If their problem is “long” term, have them go ahead and get a hard money loan. Once that transaction is completed, have them deed the home to you. Once deeded to you, reapply for a “better” loan in your name.

  2. If they have pretty much given up, offer to save their credit by having them quit-claim the home to you. Let them know that you will do your best to bring the loan “current” and fix the property for sale. Once sold, after all expenses are paid, you will then share the profits with them on a 50/50 basis.

Check your local laws before using any of the above.

I’ve heard, but am not sure, that these ideas work.

Re: Might have found a great deal…little help? - Posted by IB (NJ)

Posted by IB (NJ) on July 13, 2006 at 12:21:21:

This is a preforeclosure where the owner has less than a month to save his/her property. Don’t approach this unless you know what you’re doing and have a realistic plan that you can implement successfully. I strongly suggest you do some serious reading up on foreclosures, sheriff sales, and preforeclosures. Then partner with an experienced Investor.

You won’t be able to buy this before the auction unless you approach the owner of the property.

Ib

Re: Might have found a great deal…little help? - Posted by Joe Kaiser

Posted by Joe Kaiser on July 14, 2006 at 03:16:20:

Generally, these ideas don’t work.

You’ve created a situation that puts you in the role of consultant, rarely
a good thing.

The solution you offer isn’t good. I have a hard time talking about
“saving your credit,” frankly, and it’s rarely effective.

And the idea that you could say “I’ll do my best to bring your loan
current” will get you into trouble. Tell them you’ll get it done, and then
do so, period.

The 50/50 deal is complicated and should not be attempted without a
complete understanding of what is happening and documentation to
allow it to work. Otherwise, you’ll get creamed at the first sign of seller
disenchantment.

Joe