Posted by ken in sc on November 16, 2000 at 07:36:06:
For scenario #1 - Could you trade them a nonrefindable downpayment on a ls/op on another house that you have for sale (or can find for them) for the remainder interest in their house? This way, you almost guarantee you sell them this new house and get a good deal on the old house when the mother dies. Also, you get a long term lease on the mothers house so you can sublet it for now. That way you control it and keep the maintenance on it while you lease it before the mother passes on. Study what a Life Estate is and how it works. It sounds like the couple needs a place to live that is less costly than the mothers house, not cash. Get them what they need.
Scenario #2 - I am not sure I undertand but it sounds like either you, or you with a partner/investor need to buy this house, rent back to them until they get stable, then sell them another house. They are going to lose this house. The question is, will they get foreclosed and evicted, or will they sell before foreclosure, get some money and be able to live there until they can successfully move.
These two scenarios go out to one and all. I have 2 situations where I was wondering if there is a way for me to make money and help some people out. 1)Couple has home that they own free and clear EXCEPT the mother (who is in a county nursing home) has life use of the property. She is expected not to be around much longer(I’m not saying that to be cruel it’s just part of the scenario). A part of this life use lien is that if the title chnages hands before the mother dies, the couple would have to pay the county approximately $325,000. Also the county refuses to subordinate to ANYONE. The couple is now in need of some cash because the wife recently left her job. They would love to move into a new home but because of credit and now reduced income they cannot afford to pay PITI on a new home and TI and maintenance on the current home. My thought is this, couldn’t they find some way to L/O this and have a long-term lease (I don’t mean forever but you never know how long the mother could hang on) for someone who may need time to build/rebuild his/her credit but still get enough money down to allow them to move into a new home and possibly do a L/O of their own while rebuilding their own credit and getting the wife’s employment situated? I personally do not have the money to offer the down payment but I think there is an opportunity here. Here are the numbers: FMV $112,500. I know the couple would be willing to take $84,375 as an end sales price with maybe $15,000 down and minimum monthly payments. Is there a way that I could point a potential investor to this deal and make a little back end money?
Situation #2: A couple in need of help desperately. They will be in foreclosure very soon. They got behind because of serious family illnesses which led to death. They need 70%LTV and are willing to pay almost any type of fees and rate to keep their home. DTI will be in the 30’s after all is said and done. BUT (you knew there had to be one) even besides their soon to be pending foreclosure their other credit is shot and I mean bad!! No mortage compnay is going to touch them (trust me they have tried everyone). Is there private money out there that could help these people by putting them on let’s say a 2 year balloon and charging them some type of “fee” (like a lender would charge points) on top of a high rate (14-22%)? Worse case scenario, these people crap out on the mortgage and the investor has a home with 70%LTV with values going up all the time. We are talking a six figure loan but a borrower who has six figure income. Once again if this private money is out there can I hook the two entities together and make some type of “fee” for myself?
Thank you all for your time. All responses are greatly appreciated.