Help - Woman wants to avoid loosing home - Posted by Lette


#1

Posted by Bill Gatten on November 20, 1998 at 10:31:00:

John,

The answer: Because I want a vacation home (hypothetically in this case,) without needing to qualify for a loan, or come up with any more money or monthly payments. $6,700 and no payments…EVER… is a pretty good deal isn’t it (assuming the property is worth a hoot).

Another part of my motive in this would be to keep the lady and her husband on the loan and in the property (1/2 time), so that I don’t have to work very hard or qualify for anything. After I’m in, if they flake out again, I merely foreclose (by default in the PACTrust) and THEN assume the payment stream and the entire property (but I still don’t have to make any payments … see below).

In the meantime, I’ve been a good guy; gave them the benefit of the doubt; bought at least $10,000 worth of existing equity for $6,700; and left her and her husband on the deal to make the payments and take care of maintenance, repair, upkeep, taxes, insurance, etc., made an old couple happy; etc.

However, when (if) they screwed up again (those sweet old folks) and I ended up with the payment obligation, then I’d merely put an ad in the paper that says “NO BANK QUALIFYING, AND AS LITTLE AS $10,000 CAN MOVE YOU IN. CALL ABOUT GORGEOUS VACATION PROPERTY. 3BR, 2BTH. ONLY $_____ PER MONTH. INQUIRE ABOUT INCREDIBLE TRUST PROPERTY OPPORTUNITY.”

Then when they call, I’ll say, “Well… I have this very nice property which is worth about $------, and if you can afford the payments, I’ll just give it to you! All I want out of it is, in say, 3-4 years, I would like you to refinance it in your own name, and at that time give me back the equity that I have in it now. And, of course, if there is any appreciation over that period of time, I’ll split it with you.”

Note that at this point, I now have my $6,700 back (plus some extra) and all the equity and half of all remaining appreciation, equity build-up (principal reduction), etc. with no payments and no management or maintenace responsiblities.

And… if I still wanted to keep half of the vacation use, I’d perhaps lower the payments a bit, or decrease the amount of up front money required (nor not). I might just say, "… and… for doing all of this for you, I’d like to have the right to use of the property for, say, half the year, assuming you’re not there, of course).

John, a 50:50 time-share for $6,700 bucks ain’t a bad deal. One might even work out time share trade arrangements with a myriad of time share outfits across the world, and vacation for free anywhere you want… or rent it out one or two weeks at a time for the ?big rents.?

I didn’t do any of that with my Big Bear condo (the one I mentioned in my original post), but I could have if I’d chosen to.

Good luck,

Bill


#2

Help - Woman wants to avoid loosing home - Posted by Lette

Posted by Lette on November 16, 1998 at 12:54:42:

I received an email from a desperate woman on Friday stating that she’s trying to save their property. She and her husband are both disabled. They are currently 23 payments behind, though there are no other leins. It is their summer home and they wish to save it. I told her that I would consult with my “partner” and get back to her. The truth is, I’m not sure I can help because since I’m kind of new at this, the situation seems a little out of my reach. She needs $6,700 by the 17th, which is tomorrow. The home is located in Alleghany County, NY near the Penn State border. The couple lives in Buffalo, NY. I live in New York City and I’m hoping that someone who lives within distance of the woman can help her out. I have her telephone number which I will gladly give to anyone who wants to handle this case.

Thanks so much. I really hope someone can help her. And I hope to learn from this real-life scenario as well.


#3

Re: Help - Woman wants to avoid loosing home - Posted by Bill Gatten

Posted by Bill Gatten on November 16, 1998 at 20:06:28:

I agree with Bud B., these folks are either in denial, or know just how far they can go. Moreover, I too betch’a they have more time than they think they do, or than they told you they did: as Bud says, this is a weird date and arrangement for an auction date or trustee sale.

I’m not personally interested in a property that far away; however, I will share with you what I would do if I were you, and had the $6,700, and a desire for a VERY INEXPENSIVE vacation home (assuming its a nice one).

I would: 1) Agree to bring her loan current for a 50% share of the property (like an “Equity Share” arrangement) and a 50% share in use and occupancy. She keeps all but $10,000 of her existing equity, all the taxdeudctions, and we share in future profits. She cures the loan (with my money), places the property in a [land] trust and grants me a 50% beneficiary interest and 50% use of the property throughout the coming years. 2) Our Beneficiary Agreement then specifies the exact weeks and months of the year that I use the property, and those in which she uses the property. Now we have something like a two-party time share, in which I can rent my share out for a profit when I’m not using it (if our agreement permits it… and it would, because she need my $6,700 worse than I need another time share).

I did this on a beautiful condo at the foot of the ski lifts in Big Bear, Ca. a few years ago and ended up with the greatest bargain of my lifetime. My kids still love me, even today, for having made the deal (I fed them throughout their lives, saved each of their lives a few times, helped them buy homes, cars and snow mobiles; but it’s only the Big Bear Condo that they remember me for).

In my deal, Lette, the guy was losing the (fully furnished) condo to a trustee sale on Friday; I gave him $10,000 on Wednesday; he contacted the lender and brought the deal current on Thursday, and my family and I spent our first snowy weekend away about ten days later. I subsequently ended up selling my interest back to the original owner (a Boob, who got in the same trouble a year later, and lost the property because he was ashamed to let me know that he had repeated all the same mistakes).

Note too, that if YOU don’t want this property, there are probably hundreds who do… and you might wedge yourself between them, perhaps make a buck or two in the process (if you’re not a Realtor, you might have to do that with an saleable option agreement).

Good luck,

Bill


#4

Re: Help - Woman wants to avoid loosing home - Posted by Bud Branstetter

Posted by Bud Branstetter on November 16, 1998 at 15:52:08:

While it is not their primary home it appears they have continued to be in denial. With 23 payments behind it seems like they just don’t have the income to support it(one of those liabilities). They should have realized there was a problem some time ago. The 17th sounds like an odd date for a foreclosure auction. Maybe it is just a demand date. 23 payments either suggests bankruptcy or a private lender.

This is why you want cash available. Maybe this property is worth 100K and they are willing to buy it back for a 10K profit. You would get them to fax you a signed warranty deed and contract. Then you would get your cashiers check and jump in your car to be there first thing in the morning.


#5

Re: Help - Woman wants to avoid loosing home - Posted by John OH

Posted by John OH on November 18, 1998 at 24:44:24:

This is very similar to situations we have discussed recently. I have a couple questions so I can further understand your reasoning.

This person has not made a payment for two years. She’s only reacting now because the end is near. We don’t know how much equity she has, so let’s assume it is not a great amount (otherwise she could refinance or something).

Aside from being a good guy, why would you bail her out with your cash, save her credit, and not take the entire property? You know she won’t make the payment in the future.

Is there a reason? Thanks John


#6

Re: Help - Woman wants to avoid loosing home - Posted by Irwin

Posted by Irwin on November 16, 1998 at 20:19:11:

It’s too late for any amount of due dilligence, so you’d have to be 1)an expert in NY foreclosure law, and 2)Kreskin, in order to take this on at this late date. Is there post-sale redemption in NY? That would be their only chance, and I’m just guessing.