foreclosure assistance neeeded - Posted by sonny

Posted by sonny on July 17, 2003 at 01:24:54:

Angel, you are a positive person. I think I just learn something very important here even if the deal doesn’t go through. It is stay positive. Thank you for the encourage. I’ll keep everyone posted.

foreclosure assistance neeeded - Posted by sonny

Posted by sonny on July 09, 2003 at 14:06:33:

Hi everyone,

I need some help in this scenario. Just located a preforclose home. The owner is 2 months behind going on 3. She basically have the end of July or the bank will take over. I personally went to see her and ask all the necessary questions that will be suffice to write up a deal.

Here are the details:
First mortgage balance $177k
Second balance is $20k

She is currently behind on the first but not the second.
It gets a litte hairy. Here’s the lowdown on the her status. Below 500 score. The home currently have no bathrooms because she is remodeling from a 1 bath to a 2 bath with permit from the city. I seen the permit. Of course a working toilet, she said it was a necessity and I happen to agree. Where she showers eveyday, I didn’t ask. She took the second loan out to remodel the place about 2 years ago and it never was accomplised. Oh, did I mention she is self-employed too.

Here is my dilemma being a first time forclosure investor. She is a nice person battling bad times. I estimated the total repair and rehab to make this home sell fairly fast is approximately $30k. I will have a good contractor get a second opinion and hopefully it will be lower due to the fact that I did put in a unforeseen contingency factor of about $5k. After talking to her, I manage to take the time and drove around the neighborhood to look for homes for sale. Within a couple of blocks, I notice two homes up for sale with a pending sign. I called the listing agent and ask a few questions concerning the sales. The two homes sold within 3 days from listing date. The two homes sold for around $300k. This home has the potential to do $325k after my rehab. I want to help the owner out by giving some of the equitys after the sale to her and the rest for my trouble. Here’s my questions for foreclosure savvy folks out there. I will have a attorney write up the contract, but I need some feedback on the best way to do this deal. I know 3 heads are better then one and so on. This is what I plan on doing as of now.

I want to take over the loan and not be legally responsible for it.

I will bring all the delinquencies up to date.

I assume the contract will have to be written up with a “subject to” clause.

I will give her some money to move out and also put that on the contract. I want to give her some now, and the rest of the balance when the home is sold.

The home is located in a prominent Bay Area location that is growing by leaps and bounds. I would assume(I generally don’t) $100k below the market price is fairly safe, I am willing to take this venture on. I don’t want lose this deal, and I would like to entice her. She is very adament about the equity because she knows what the house value will be worth after rehab. She implied she is willing to lose the house but want a fairly large chuck of the equity back after the closing. At this point, how would you savvy folks write this deal up. Any feedback will help to create informed decisions on my part. If you need more information, please reply and I will oblige.

Thanks,
Sonny

Re: foreclosure assistance neeeded - Posted by Angel Gutierrez

Posted by Angel Gutierrez on July 16, 2003 at 22:36:16:

Why don’t we keep the replies on the board for everyone to see
what’s going on, OK?

Sonny wrote:

Hi Angel,

Its true. I know the area very well. I has more than 100k in
equity. She owns the property for more than 20 years. She
knows the value too. Thats why she is reluctant right now. I just
told her to deed it to me and she’ll walk away with $50,000 cash
to start over. She is doing everything she can to try to salvage
what she have. I know nobody wants to lose their home, but I
analyze her situation, she is dead in the water. Even if she comes
up with the past dues, she’ll still struggle with future payments.
What she wants to do is borrow around $20k, get the house done
herself, then sell it to reap her own profit. Next to impossible
because she already has a 1st and 2nd out plus she is the middle
of a remodel with the bathrooms not functioning. To add salt to
the wound, her score is below 500 and self-employed. She is
desperate enough to want to find a contractor or investor that
will exchange favors if you know what I mean. I advise her I don’t
mix business with pleasure. I told her the balls in her court. She
can start over fresh with $50,000 now or lose everything. I called
her couple days ago and she seems mad that I did. I then called
and left a message what I will do. I have my attorney ready to
make up the contract and when she is ready, I’m ready. I think
she couple of weeks before the payments are up again. At this
point, I don’t really know what I can do. I don’t want to show up
at her home and feel unwelcome or get yelled at. At this point
what would you do, Angel. Any suggestions would help. If this
transactions works, it will start my dream to become a real estate
investor. It will help finance my bills so I may pursue this dream
full time.

Thanks in advance.

Sonny

PS I know deals like this don’t come very often. At least for me.
Did I already kill the deal?

To answer your question…no. Absolutely not! My advice to you
is…Stick with it! Stick to her like stink on shxx! This is worth
100k. I’ve done a lot more for a lot less. By all means, do not be
shy.
Funny thing how things work out if you keep your eyes and ears
open. Case in point (happens a lot more than you think)…
I went to see a house a month or so ago in a "real nice"
neighborhood. I showed up and this house was a "termite farm."
On top of that, the guy that was selling , paid too much.
I got in my truck to leave, I figure, let’s take a look around the
neighborhood. I drive down a few streets, I see a guy locking the
front door to his house, what hit me was his FSBO sign leaning
against the side of the house. I stopped to talk. Turns out, the
bank is foreclosing, he doesn’t want it, I take a look, tell him I’ll
take it, he says forget it, another investor already tried to buy, no
go. I said, OK, and we’ll try anyway.
After a few phone calls, I got a deed from the guy and the bank
said they would gladly take 80k than foreclose…on a 235k
house…? I said OK. I was going to flip it, but after the rehab, it
came out so nice, I decided to move into it…I couldn’t help it! This
is a Niiiice House in a GREAT neighborhood.
So… moral of the story…
a deal takes you in a direction…go with it and leave your
blinders at home.

Hope this helps because it definitely helps me to write and tell
others about the things that happen to me.

Angel
Dallas, Tx

Re: foreclosure assistance neeeded - Posted by Angel Gutierrez

Posted by Angel Gutierrez on July 16, 2003 at 24:56:42:

If what you say is true about this deal, and you think there’s 100k
in it for you, grab it NOW. As far as her equity is concerned, she
already got it by not making payments to the bank. Tell her you’ll
take deed to the property to make this HUGE problem go away. If
she won’t go for it…keep walking. Then stay in touch with her by
calling, or swinging by and chat every few days. In the end, you’ll
be the only one standing and she’ll give you the deed. It’s up to
you if you want to give her any money.
I take it, by the sound of your post, that you don’t have a whole
lot of experience with this stuff. If that’s the case, start reading
everything you can get your hands on so you can play this game
well. You’ll still take your lumps and bruises here and there, but
you don’t want to end up black and blue over something trivial
that could’ve been avoided easily. If you’re still unsure, maybe you
should give me the address to the house…
Hope this helps…go get 'em!

Angel
Dallas, tx

Re: foreclosure assistance neeeded - Posted by Billy

Posted by Billy on July 10, 2003 at 13:50:06:

I’m not a foreclosure expert, but I would try reasoning with her the facts of the case. Which are without you, her home will be forclosed on and her credit will be even worse, and she will get absolutely nothing. At most, I might offer her a minimal buy-out fee to entice her along with the chance to not have her credit deteriorate even more. That would be a last resort.

Just remember, it’s all business - hard as it is, don’t get personal. And remind her, the bank sure won’t care about her credit, nor offer any type of minimal buyout (maybe $5,000 or so - if that).

Billy