Workin on 1st deal, need advice!!! - Posted by Shelton_in_VA

import · January 12, 2004, 5:11pm

Posted by E.Eka on January 13, 2004 at 13:18:04:

You don’t have to give him $10,000! More like $2,000 or so. He’s going to lose his house regardless, he should be happy you can solve his problem.

import · January 12, 2004, 5:11pm

Posted by Shelton_in_VA on January 12, 2004 at 18:11:58:

I found a property in pre-foreclosure. There is only about $31,000 left on the mortgage. The ARV is about $96,000. It goes to auction in about three weeks. If I wanted to purchase this house would i have to contact the bank or go to the owner of the house. Is this deal as simple as signing the deed over to me, while paying off the mortgage and giving them $10000 to move out? That way i save them from foreclosure and put a little money in their pocket. Then turn around hold the property and rent it out?

I am a beginning investor so I don’t have an extreme amount of knowledge in this area. I was wondering, is this a good way to do this deal and if not, do you have any advice on what you think i should do with this deal?

import · January 12, 2004, 5:29pm

Re: Workin on 1st deal, need advice!!! - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on January 12, 2004 at 18:29:34:

The bank does not own it right now so they can’t sell it to you. They can sell you the note, and might do that if asked (or not).

The owner can sell to you today, and no it is not quite as simple as you state but you are on the right track. There will be costs for late fees, lawyers fees, and what work the court system has done so far. Do not be surprised if the owner will not take $10K, and also do not be surprised if he does take the $10K and then won’t move.

In my county the $96K FMV house would very likely bring $100K on the court house steps. So this can be very different from place to place. Do not be surprised if nobody will talk to you about any of it either.

import · January 12, 2004, 6:42pm

Re: Workin on 1st deal, need advice!!! - Posted by Shelton_n_VA

Posted by Shelton_n_VA on January 12, 2004 at 19:42:05:

Thanks for the advice! If you were me would you continue to pursue this deal or leave it alone?

import · January 12, 2004, 7:01pm

Re: Workin on 1st deal, need advice!!! - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on January 12, 2004 at 20:01:07:

I would continue to investigate. Find out what the seller needs, and get some idea of what the property might sell for at the sale. Think about offering the seller a note for his equity or part of it. The seller may well be of the opinion that the property will sell for a fairly high cash price, and he will get the cash difference after the expenses are all paid. He may be correct. Not knowing what you have to work with there may be a way to buy taking over the loan + some cash to the seller + a note to the seller, payable later.

The problem comes when we try to figure out how much to put in, for the equity that may be saved. At least there is equity here so this is a good one to work with.

import · January 12, 2004, 7:08pm

Re: Workin on 1st deal, need advice!!! - Posted by Shelton_n_VA

Posted by Shelton_n_VA on January 12, 2004 at 20:08:41:

Thanx for the advice. I am definetly gonna do some more investigation. Most likely the seller doesn’t know what the house is worth. And may not even have to give note for equity. Yup, gotta do some more investigation.