Can I help this friend? - Posted by Bill D

Posted by Bill D on May 18, 2007 at 19:18:47:

Michaela,

You give sage advice…

Thank you

Can I help this friend? - Posted by Bill D

Posted by Bill D on May 18, 2007 at 15:52:22:

My wife and I have a friend who is facing foreclosure, she’s broke, newly divorced, has a kid and makes a meager salary. She has no place to go, lives with her 80 y.o. mom and is in dire straits.

Her place is in a very desirable town in CT…She owes about 325k [100k of that is a HE loan ].

House needs work and she has been unable to sell at an asking of 415ish…All fixed up, I’d estimate the place would command around 500k maybe a bit more…

I’m just throwing this out there - so don’t laugh…

What if I make the pmts current and let her stay there.
Get contractors to fix up the place - put it back on the market - Sell it for 500k - 525k…Then split whatever the profit is…

She moves out, has some start up money, no foreclosure on her record and the best part - I REALLY helped someone out…

Am I nuts here???

Thank you

Re: Can I help this friend? - Posted by Gene

Posted by Gene on May 21, 2007 at 10:24:10:

As a friend…I would tell her to DROP THE PRICE and get it sold…NOW. It seems to me if it was such an easy and profitable rehab, that a rehabber would have purchased it from her by now.

She has equity…she should give some it up to get out of the foreclosure and loosing ALL of it.

Gene

Re: Can I help this friend? - Posted by Brian_wa

Posted by Brian_wa on May 19, 2007 at 20:33:34:

Have a little faith. If you have good knowledge and resources, and you can’t find a way to help out a friend in need, then maybe you’re not that good of a friend.

Find some ways to help her and protect yourself should things go wrong is not that hard. I have helped friends before and got screwed by a couple of them but that doesn’t mean I’ll lose faith in humanity.

Here’s what I would do:

  1. sit together with her and set up a plan of action that you and her can live with
  2. Have her bring that to her own attorney and get it checked out. Do not proceed until the attorney signs off on it
  3. Give her 3 days to think it over afterwards and also explain to her in detail how much you anticipate making from this transaction.
  4. After all this and she’s still ok, then proceed.

Brian

Re: Can I help this friend? - Posted by Natalie-VA

Posted by Natalie-VA on May 19, 2007 at 15:34:32:

Don’t do business with your friend. It’s sounds like she’s not too motivated. If she really wanted to sell, she’d drop her price to 349k so she could sell and pay the commissions and her loans. It amazes me that people in dire straights can be in such a bind and still price their houses too high. I’d stay away from this deal.

–Natalie

Re: Can I help this friend? - Posted by michaela-ATL

Posted by michaela-ATL on May 18, 2007 at 16:03:34:

Bill,

I believe that’s what Joe Kaiser has been doing. The problem is, once it comes to money, the best frie nd may turn on you. What’s to keep her from going to court and claiming, that she didn’t understand and that she thought you just did this to help her and she didn’t realize she was giving half the property to you?

Michaela

Re: Can I help this friend? - Posted by Bill D

Posted by Bill D on May 18, 2007 at 18:40:44:

Yep, 100% Agreed - But at some point, one has to have some modicum of faith…And let’s face it, there are few RE deals that come with no risk…Right?

Soooooo on the fence with this…

Re: Can I help this friend? - Posted by michaela-ATL

Posted by michaela-ATL on May 18, 2007 at 19:15:50:

Bill,

you’re right about there always being a risk. What I’ve found over the years, though, is that I’d rather do any kind of business deal with a stranger, than a friend/relative, because friends/relatives expect you to give them special treatment. As much as you try to keep it a business proposition, it easily turns too personal. If it works - great. But I’ve lost a number of riendships by doing bus. with friends. I will never again hire a friend or rent to a friend. It’s just not worht it in my opinion.

You’re the only one who can made the determination of what this risk is, so choose wisely.

Michaela

Re: Can I help this friend? - Posted by Brian_wa

Posted by Brian_wa on May 18, 2007 at 18:45:38:

If you have an opp. like this to help out a friend, get everything signed up with an attorney just so you and her know exactly what to expect. Show her what she could get if she sells it in as-is condition right now. Then show her what she would get going with your plan. If she benefits more going with your plan, then she’d be crazy doing any other way.

Brian

Re: Can I help this friend? - Posted by Bill H

Posted by Bill H on May 18, 2007 at 23:16:01:

Michela—You are absolutey RIGHT. Let me tell you the worst mess I ever got into was one time my wife was working in a local major chain jewelry store. The local manager and family needed a place to stay…'nuff said…we rented to them and it went to hell in a handbasket immediately…she lost her job as a result and I almost had to evict.

NO MORE friends, relatives, kinfolks, employers, etc.

Good Luck,
Bill H