Pre-foreclosure Deal. Need Direction - Posted by j

Posted by Michael Afesi on August 08, 2005 at 11:56:07:

Once you get the deal signed up, you may want to secure financing through a hard money lender that does not look heavily into credit(and rather uses ARV of the home). Though they might charge 18-15% percent, it would help you to avoid a partner and still retain a decent return . Look in your local sunday paper and search under money to lend…a few calls might go a long way. I usually would not recommend letting the homeowner stay in the home because of sentimental ties and “misunderstandings” a year or two down the line, as to how the deal was originally drawn. If you have no problems letting homeowner and her friend stay, you may want to put in a protection that you could foreclose if the loan was late for any time during the probationary 1 year. You also might want to think about getting ACH (automatic clearing house) where you would take the renters debit information. If they are not comfortable with this, you may want to increase the security deposit to hedge your investment. for the actual rent to help ensure that payments are made on time. Best of luck, hope this helps and please keep us posted.

Pre-foreclosure Deal. Need Direction - Posted by j

Posted by j on August 05, 2005 at 12:25:55:

Hi All. OK this is my first pre-foreclosure deal. I just got off the phone with home owner. Mortgage is 51K and it’s in arrears for 7k and comps are in 80-85 range and steadily climbing. She said she wants to walk away from it, start over and keep what’s left of her credit intact. Her husband left her 8 months ago, and he was the primary wage earner and that’s why it’s in foreclosure.

My credit is not that great, I’m still working on it (557 mid, high 560) I’m just recently self employed, and I only have 2k in the bank.

Anyone have any real suggestions as to how I can finance this house? I would rather NOT bring in a partner, (an investment partner screwed me years ago and that’s why credit is so low)
Thanks in advance…

Re: Pre-foreclosure Deal. Need Direction - Posted by Dave NY

Posted by Dave NY on August 05, 2005 at 12:36:21:

Buy the property subject to or get the deed.
You then sell via land contract for $85,000 & ask for 7-8K down. From that amount you pay the arrears. When buyer refinances, you will make a nice $30K+ profit along with positive cashflow every month.

Dave NY

Re: Pre-foreclosure Deal. Need Direction - Posted by j

Posted by j on August 05, 2005 at 12:54:31:

From time I posted until now. I got a return phone call from her. She wants to stay in the home. Her best friend wants to move in because she’s getting divorced. BUT best friend makes great money and will pay rent.

This is exactly what she said to me "I don’t want the responsibility of owning a home, I would much rather pay rent. I will sign the house over to you, if you just take care of this mortgage problem for me. But I want to stay here and rent for at least a year.

Anyone have any thoughts on that? I don’t mind doing it.

Re: Pre-foreclosure Deal. Need Direction - Posted by James Harris

Posted by James Harris on August 05, 2005 at 13:53:13:

Get the deed. Perhaps you can get a credit card or a partner for the 7-8k arearage.