Pre-foreclosure - Posted by Mr. Ed Atlanta

Posted by Kate (VA) on February 12, 2001 at 10:51:54:

No, I think I’ll save my questions for the more knowledgable folks on this board, particularly those with less attitude than you. I would simply like to point out that no one is forcing this owner to do ANY deal. If he agrees to what Mr. Ed proposes it will be of his own free will. Maybe the owner would sell during a redemption period, maybe he wouldn’t (as I said before, he hasn’t taken advantage of the past 6 months that he couldn’t make his payments to sell). In any case, the owner has the ability and the responsibility to say no if he doesn’t feel this deal is in his best interests. To imply that Mr. Ed is somehow morally corrupt for trying to get the best price he can on this house is ridiculous. He’s an investor, not a social worker.

One final thought, your two options are not the only possibilities. If the house is sold at auction, there is no guarantee that it will sell for the amount you suggest. It may very well sell for only the amount due on the loan leaving the owner with nothing.


Pre-foreclosure - Posted by Mr. Ed Atlanta

Posted by Mr. Ed Atlanta on February 10, 2001 at 10:45:52:

I desperately need help structuring a deal where the owners of a property is just before foreclosure with property
valued at $160,000.00, wants to take much equity as possible (has mentioned 5k). Payments are Six months behind
@700+ $ a month. Have info to contact lawyers handeling case
but have not talked to them yet. If I use hard money to bring payments current and can qualify for new loan, how can I make any money without having someone standing by to
purchase or take lease/purchase option right away.
If anyone out there has a cookie cutter approach to this one
please help me out. I need to move on this as quickly as possible.

Re: Pre-foreclosure - Posted by Dan

Posted by Dan on February 11, 2001 at 17:47:00:

Ed, good luck with it!

By the way, how did you come across this cash cow?

Re: Pre-foreclosure - Posted by Irwin

Posted by Irwin on February 11, 2001 at 06:22:49:

Don’t worry about “structuring” a deal like this. The important thing is to get the purchase agreement signed immediately. Don’t haggle. Offer the seller whatever he wants, but be sure that the agreement has him represent how much is owed on the property. Offer all cash at closing, which can be immediately upon completion of due dilligence, i.e. title work, payoff confirmation, etc… Don’t worry about where the money will come from. If this deal is what you say, you’ll have people (like investors) beating down your door wanting to buy in. The main thing is to get it legally tied up. Then, sort out the details. BTW, this one sounds too good to be true, so be sure all angles are checked before you part with any money.

Create a note and sell it for cash at closing - Posted by Monique

Posted by Monique on February 11, 2001 at 24:29:49:

Mr. Ed Atlanta,

If the loan balance is $41,000 and the seller only wants $5,000 on a $160K property, you should RUN (not walk) to get this deal signed up. You’ve got TONS of head room for creative deal structuring. You can bring the payments current, pay the $5k, and use none of your own money.

For example, agree to purchase the property for $53,000. Make the deal Subject To the 1st Mortgage at $41,000 and have the Seller take back a note for the $12,000 difference. Arrange for the Seller to sell this note at closing for $9,200. Use $4,200 to bring the 1st Mortgage current and $5,000 to pay off the Seller.

I would think it unusual for a seller to walk away from $120K of equity on a $160K property and only want $5,000. But, hey I guess I’ve seen stranger things.

If you need someone to buy your Seller’s note to make the deal work, email me privately.


Re: Pre-foreclosure - Posted by JoeKaiser

Posted by JoeKaiser on February 10, 2001 at 21:39:20:

There are no “cookie cutters” out there, so you can stop looking now.

You have a perfect “cash at closing” situation. Jump on it.

Write an offer to the seller and agree to give him his dough.

Couple things jump out at me . . . $700 is high for a $41k loan, unless it’s real old or real short term or real high interest. Double check that thing out. Also, saying he wants to “take as much equity as possible” and agreeing that the number is $5k doesn’t make sense. I’d think he’d be looking for ten times that amount.

Still, go write it up now and sort it out later. My hard money guys will lend $100k on that thing, and I’d go get every dollar of it, paying off the first (you can’t get hard money for back payments, they want a first mortgage 99 times out of 100 so you pay everything off) and pocketing the difference. When the dust settles, there’s a chunk of change in your bank account approaching $50k.

Need a partner?


Re: Pre-foreclosure /A Great Deal? - Posted by Sam inTx

Posted by Sam inTx on February 10, 2001 at 16:09:15:

I’ve only been coming hear about a month and from what I’ve been reading, this is the perfect deal if there aren’t any other liens, in good condition. Looks about a 25%LTV. Plenty of room for profit. Being a begginer, I can’t help you Ed but I will watch closly to see how you do. How can I find a deal like this. Keep my ear to the ground, buy listings, network or what. Did I calculate that LTV right?

Re: Pre-foreclosure - Posted by Charles Steed

Posted by Charles Steed on February 10, 2001 at 11:19:14:

What is the loan balance?

Re: Pre-foreclosure - Posted by Potash

Posted by Potash on February 11, 2001 at 10:23:49:

Smells like a Leo to me.

Re: Pre-foreclosure - Posted by Mr. Ed Atlanta

Posted by Mr. Ed Atlanta on February 11, 2001 at 08:05:34:

Hey, Charles Steed. Where are you my friend? These pins
and needles are getting very uncomfortable!

Re: Pre-foreclosure - Posted by Mr. Ed Atlanta

Posted by Mr. Ed Atlanta on February 10, 2001 at 14:47:58:

Thanks for your initial response to my plea Charles.
The loan balance in $41,000.

Re: Pre-foreclosure - Posted by Charles Steed

Posted by Charles Steed on February 11, 2001 at 09:50:53:

Took Sat. off. You’ve gotten plenty of great feedback from some well qualified people. If you’ve got those numbers right, this is what we call a “no brainer”! I’m with Joe, however, $700 payments on a $41K loan seem way out of line. Do some more checking and keep us posted.

Re: Pre-foreclosure - Posted by Mr. Ed Atlanta

Posted by Mr. Ed Atlanta on February 11, 2001 at 15:07:08:

Thanks to all of you who threw out the lifeline.With what you’ve given me it will be very hard for this not to be a BIG “WIN-WIN” deal.I’ll work on the hard numbers right away to remove any uncertainty. Thanks again and I will keep you posted.

Re: Pre-foreclosure - Posted by Lance

Posted by Lance on February 11, 2001 at 21:28:02:

What you do is your business, but I have to ask. Do really consider buying someone’s $160,000 house for less than $50,000 a WIN/WIN deal? p.s.: this deal aint gonna happen wheelspinner

Re: Pre-foreclosure - Posted by Kate (VA)

Posted by Kate (VA) on February 11, 2001 at 22:35:45:

I would definitely say it’s win-win. How much is this guy going to get if his house goes to foreclosure? That would be $0 and ruined credit to boot. The owner has had six months to market his house and sell it for more than that amount and he didn’t do it. At this point, anything that puts any money in his pocket is a blessing for him.


Re: Pre-foreclosure - Posted by Lance

Posted by Lance on February 11, 2001 at 23:28:50:

In answer to your question:
2 possiblities (if what Mr ED stated is correct, I’d bet dollars to dounuts it isnt);
a. there is a redemption period in GA (I dont know if there is or isnt, and neither does MR ED), owner sells house during redemption period.
b. There is no redemption period in GA, house is bid up at auction to $90,000++. owner gets overbid. Any other sophomoric questions?