Posted by Clair-MO on November 19, 2004 at 09:38:40:
Sean, I think that you would be better off kicking the owner out on his tush when you take control of the home. You mentioned that you will give him a price that covers the existing mortgage and give him a sizeable down payment when you sell the home back to him. You will collect the sizeable down payment and he get the refinanced. There are several questions comes to my mind:
Are you going to get a first mortgage on the home yourself?
Since the owner has filed bankptcy it is going to be difficult for him to get refinanced so the question is how is he going to refinanced?
I am assuming that the owner needs some money to move on if you can resolved his delimna(sp?)The problem can be a simple one to resolve in that he can create a new mortgage and sell the mortgage note to you to recoup some of his equity. You might want to do some research in the cash flow section on this site on doing partials and see if this is feasible for you to do as far as my understanding in doing partials is there is no credit check or appraisals done on the part of the creator of the mortgage note or the buyer. If you need more information email me and we’ll talk, fair enough? I would never sell the home back to the owner because of the fact he would be a extremely bad risk.
The situation:
I met an owner who doesn’t really want to sell, but is interested because he is under bankruptcy and no one will refinance him. He really wants to get refinanced. He has quite a bit of equity in the home also. I was sitting and brainstorming ways to help him out and benefit from it. Someone tell me if this is a good, bad (stupid), legal (illegal) idea. It’s actually two ideas.
The ideas:
Idea 1: I purchase the home from him by paying the existing mortgage off. I then sell the home back to him, get something of alot of value from him for a down payment (boat, car, diamond ring, something that will make a company want to finance him). This way he gets refinanced, and I walk away with a check.
Idea 2: I purchase the home from him for a price that covers the existing mortgage and gives him enough money to make a sizeable down payment when I sell it back to him. I sell the home back to him, collect a sizeable down payment, and he gets the financing. This way, he gets refinanced, I get my money back from the original purchase, plus the money from this purchase, and walk away.