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I’m reaching out to the more experienced investors in hopes that you can show me an idea that hasn’t occurred to me yet. Let’s say there’s a seller that needs to get out of his housing situation. His home is in pre-foreclosure, and this situation could turn into a wholesale except that he has little equity and a good deal on the property (~70% ARV) wouldn’t be enough to cover what he owes. I’m learning about other more creative techniques, but I haven’t yet thought of any way of making this work that doesn’t require a large amount of cash to cover what he owes the bank.
Maybe we could work on getting the payments current again and speak with the bank directly about a plan to get back on track. I’m sure they would rather not foreclose, though I have no experience with such matters so any advice would be greatly appreciated.
Not sure if I’m even thinking of this the right way due to my lack of experience, so I’m interested to hear what others might offer. Thanks very much for your time and anything you’re able to share.
Jake,
First off – welcome!
You wouldn’t happen to have a relative named Clifford, would you?
I had a childhood friend with that name. Great guy!OK, let’s collect some info so we can make multiple offers.
How much is the property worth in its current condition? Not ARV.
Does it need any repairs? If so, what is the cost of those repairs?
How much debt is on the property? Total amount and monthly expense. PITI. Principal, interest, taxes & insurance.
How much would it cost to bring the property out of foreclosure? When is the foreclosure sale scheduled to occur?
What state is the property located in? Some states take years to foreclose, while Texas takes about 3 weeks.What will the owner do if you can solve the problem?
Move or stay?With these and other facts, we can now construct offers that could solve the sellers’ problem.
Or maybe there is no deal here. It happens.Keep us posted,
Mike Weiss
Unless the house needs a lot of work, you would not be able to negotiate a short sale.
What’s owed? What’s it worth?
What would it take to bring the payments current? If there’s equity that could be a possibility.
Since the federal government lets people live in a house without making rent or mortgage payments for more than a year, it is unlikely that this will work out. The back payments and penalties could be way too high.
As Mike said, we need to know the numbers to know if there is anything you can do.
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