Brad,
Well, based on your post, you know to approach this with caution.
Remember, money changes people.
I’m sure these are good folks, who simply had bad life circumstances handed to them unexpectedly.
However, after the problem is solved, and they are still living in the house, they might rethink their position.
Honestly, after getting burned ONCE, well, not burned, but a hassle to get people out after I bought, I set a new “company policy”, which is to only buy when sellers will leave.
I understand the slower market during fall and winter months, as I used to live in the northern part of the country myself.
Winter was slow for buyers.
But, the deals were better, because of that.
If you can factor in some holding time, you should be alright.
Just market the house aggressively, leaving your message that it is for rent, or for sale everywhere you go, and then some.
Buyers and renters are out there 12 months out of the year.
They just remain indoors when it is cold.
Perhaps use the neighbors to advertise the place.
A flyer that says, “Get paid to choose your neighbors”, and then talk about the house, the terms, and make it clear that you will pay some cash to anyone sending you a qualified buyer or renter.(which ever you are going for.)
Beleive me, if you market a house hard enough, and the numbers you are offering are decent, it will move.
Just takes more effort in the colder months up north is all.
Re-renting back to foreclosing owners. opinions? - Posted by Brad (Wa)
Posted by Brad (Wa) on August 16, 2003 at 14:18:32:
I am purchasing a 2bd/2ba house for $128k that just appraised for $160. We are closing mid-Sept., with the auction date close. The appraisal came in with two bedrooms and a common area downstairs unfinished. Could appraise for $168-$175 with the work finished.
The problem is that the owner has now asked me if he could just rent the house from me. I have agreed to give him some money to move out, but now I could hold the money, have him finish the downstairs to get a better appraisal when (or if) he decides to move out. I could get a higher asking price if I sell, get a much higher rent or look for renters (or buyers) in the spring when all the flowers are blooming and the market isn’t flooded with houses for sale (like it is here right now).
If he moves out, I will be sitting on a vacant house with Oct/Nov right around the corner (I have had a hard time getting good renters in the late fall).
I am confident that either way I go, I should not have a hard time making my money. I am looking for opinions about this situation. I know the old phrase “If they couldn’t make their payments, how could they make them now?” They are decent people, who both work and are responsible. They just had a lot of unexpected things land in their laps, which would bury just about anyone.
Anyone have any good or bad experiences with this type of situation? I have considered Joe Kaisers aproach of paying their arrears and splitting the equity, but it has a high interest rate and would not work in this situation.
Thanks for any input.
Brad, just be sure that this 2 bedroom home really is worth $168k-$175k; not just a “could”. I am trying to figure out where this house may be located that would come anywhere close to $168k for a 2 bedroom house.
So, just double check your numbers to make sure everything really does line up properly. You have what you can pay for it, you have someone’s appraisal report for refinancing issues, but you didn’t state what the FMV was on the property. A 2b/2b would be hard to get comps since 2b/2b are not abundant in many neighborhoods.
Since you stated house, instead of condo, there are very few areas within the tri-county area where a house with 2 bedrooms has a FMV of $168k. The area where this house is located may be worth $168k, but I would make sure the numbers are accurate if you are depending on these numbers for a profit.
NOTE: Excluding a home with property, a view, or something that would increase the land value.