Forclosure deal need ADVICE - Posted by Angie (New York)

Posted by pboone on March 08, 2006 at 08:36:43:

Go to this persons house, have coffee and a proposal ready. Leave the amount blank and have him fill it in while at the table. If you agree to this amount both sign. Cash him out.
Please be ready with cash or financing to close this deal.

Forclosure deal need ADVICE - Posted by Angie (New York)

Posted by Angie (New York) on March 08, 2006 at 07:49:46:

Hi, I am trying to put together an offer for a person that I found in my neighborhood that is in forclosure. Here are the stats.

The balance to payoff the house is $339,000. The amount owed to make the house current is $15,749. I did a CMA with my realtor and the house is valued at $750,000. I spoke to the owner and he said he had $100,000 in other debt to get rid of and he wanted money to go forward with his family. He also said that there was anther inverstor that contacted him. He wants me and the other investor to submit a proposal on how we can help him

Can someone advise me on the best way to approach this. I was thinking of making him current on the mortgage. Keep the mortgage in his name and continue to make the payments unttil we sell the house. Then split the profits 35/65. He would get 65%. I am not trying to be greedy. I just want to make some money in realestate. I don’t know if I should try to buy the house outright ( I can afford to do this) and then sell it. However, he seems to want a lot of money 100k for bill and walking money.

How can I win this. There is another investor pursuing this house as well.

Thank you

Re: Forclosure deal need ADVICE - Posted by Joe

Posted by Joe on March 08, 2006 at 13:59:10:

pboone’s advise on how to approach the situation is good (let the homeowner make the first offer) … but you still need to know what your max offer would be going into the situation.

Until you can figure out all of the liens and debts owed, you can just put a normal purchase contract on the property for maybe $575k ($339k + $100k + $11k other random costs/liens = $450k, $750k - $450k = $300k, split 50/50 is $600k … back off $25k just for good measure). And this purchase contract would say “deliver clean title free of all liens, etc”. Then, once you figure out the title report, and you come up with other debts that the owner wants to get rid of, you can adjust your contract to include them. I think this works because then you are in control and telling the owner that yes, you will pay down this debt, this debt, and this debt. They don’t have to worry about anything except signing the docs.