BiggerPockets

If someone is in pre-foreclosure it is not as simple as taking over their payments. You will need to have enough cash to bring the loan current and get it out of the foreclosure process. You will also need to watch out for liens and junior loans. Eventually, you will need to qualify for the loan to get the mortgage out of the seller's name.

Another creative method is to do a land contract. You find a seller that wants to sell. Ideally, they will have a low or no mortgage and don't need the cash. These are typically stage-of-life sellers or owners of multiple properties. You agree on the monthly payments. The seller keeps the title until a mutally agreed on date of on-time payments usually 3 years. This allows you to control the property at today's price and gives the seller recourse without having to foreclose should you default.

You can also do a lease-purchase which gives you the option to buy the property at an agreed upon price at some time in the future. You will need to negotiate how much of the lease payment goes towards the purchase price when you decide to exercise the option. This method doesn't give you control or ownership of the property until you exercise the option.

What is your credit Score?
USDA loans allow 100% financing.
Typically 620 min fico but they will go to 580 with some compensating factors.

matthew,

its a family of 3. my wife has been wanting a home for us to settle down in. i'm sending you a pm now about structuring a lease option.

I am about to place a bid on three different homes owned by the county where I live.

One, a duplex, the other two are SFH's
It is a process similar to REO's except that after the bid is accepted by the delinquent tax authority, it has to be advertised in the newspaper for a period of time (10 days here) and if no one else chooses to upbid you then you recieve the deed to the house free and clear.

The full purchase price may be required by some places at the time of the bid, but this is often a whole lot less then what is usually required for a downpayment. Each of the three properties will cost between 1,000.00 and 3,000.00 total.

The downfall is that there is almost always a lot of things to be fixed up.

Usualy the county manager, or their secretaries, will be able to give you information about these properties.

It is similar, but different, as there are actually about 8 different type of "tax sales".

The houses that I am speaking about have already been through at least one tax sale and no one bid on them, therefore the county (who officially enters the first "starting" bid) bought the homes officially. They have been held on the county books and probably offered at several tax sales, but no investor was interested and the county still ownes them.

This is why they all usually need fixing up. Some quite a lot of work is needed.
As far as reclaimation periods, these have already passed and there is no chance of anyone reclaiming these properties. They are often referred to as "surplus lands"

Due diligence is an absolute must as there is never a guarantee of any kind to the condition of the property.
The only kinds of liens that may still exist on these is usually a lien from another governmental agency such as CITY, COUNTY, STATE, FEDERAL.

I am buying a duplex valued at 45K in its current condition for only 1K. So financing is not an option here, you must have the whole amount ($1,000.00) in order to start the bid process. If someone outbids you and you cant outbid him, then he becomes the winner of the property and from what he gives them they return your money, so no chance to loose your money, but it is tied up for the duration of the bid process.

Personally, I think owning a home is often overrated. You can "settle down" just as easily in a rental, and those are usually a lot cheaper up front and monthly.