Posted by RS (So. CA) on February 01, 2002 at 11:10:05:
I am by no means an expert (and I welcome someone to correct me if I am wrong), but it sounds like they are primarily in the note business.
That is, it doesn’t sound very different from “Lonnie deals,” where Lonnie finds mobile homes for cheap, purchases them wholesale (or below), then sells them retail while carrying the note (i.e., owner’s financing). There is, of course, a difference in that these are probably not mobile homes, the buyers are actually the former owners, and there appears to be a kind of purchase/option type agreement involved. The profit for IRE is probably made on the spread between the purchase price and selling price, interest rate (I couldn’t imagine they would offer market rates given the buyers represent a known risk), loan origination fees, etc.–although, admittedly, I am guessing here.
Assuming they are not violating any foreclosure laws (which I know very little about), what, specifically, doesn’t sound right? I am not trying to be argumentative; rather, I am attempting to better understand your suspicion, and thus possibly learn something new.