How can I help someone who is in pre-foreclosure without taking advantage of them?
Is there a way to help someone sell their house or use some sort of wrap-around financing to sell their house and get back a portion of the sale or payments for myself?
The owner has some equity but I don’t want to steal it from them (deed-in-lieu or something like that). I just want to help them out of a bad situation and make a little something for myself.
Does anyone have any recommendations about how to do this? The property is located in Denton Texas. Is anyone already doing anything like this in Texas?
In number 4 you're asking the contractor to do the job for free and pay PITI in the hopes that it might sell some day. How is the deficiency cured in this scenario (owner, you, contractor)?
You told us the owner was paying the monthly payments after moving out but decided to stop once his relatives trashed the place. This implies he has the means to pay the monthly payments (unless I missed some other reason).
Is the owner willing to make monthly payments until it sells if you pay the deficiency?
Is the owner willing to make monthly payments until it sells if a contractor finances the rehab?
If neither of the above are true, why would you or the contractor or any other white knight take this risk?
In my post on Mar 06, 10:24 AM, I wrote; “The owners already bought another house and live somewhere else. Their family members were in the house until the owners didn't have enough money left to continue to pay the additional mortgage. They finally had to kick them out and the house is now vacant.” (about 15 down from the original post)
In number 4, I would probably have to clear up the deficiency if I wanted to be part of the deal. Since there is no other money available, the contractor would have to cover fix-up costs and "pay PITI in the hopes that it might sell some day." I am not an expert in rehabs so I am not sure it this is something a contractor would consider.
The owners were trying to make everyone happy, the bank and the family members until their money ran out. They are good people (not so bright about helping out family members) but they just don’t have the funds to make the loan current or continue paying on the second home. They need to sell.
The reason I started this thread is that I have heard from a lot of “guru’s” promotions that investors can take over properties in pre-foreclosure SUB2 and sell them to make a profit. In this case, I might be able to do that because the owners have equity but how would that work for a property with no equity or the loan amount is more than the house is worth?
Why is there so much hype about real estate investors getting on pre-foreclosure list services if you can’t do anything with the properties to make a profit?
In this case, I primarily want to help out the owners but eventually I would like to apply proven techniques to “make money with foreclosures” (as the gurus say) in addition to helping out those who are in foreclosure. Is anyone out there making money with foreclosures? How?
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When this began I assumed you did RE in some manner and had a situation, clearly not the case.
If I were in Denton, Tx, I'd have this done and flying in 3 days and have it in contract, but you aren't me.
I don't think you have time to learn while your "friend" is under the gun!
You really need a "team" of players in RE, buyers, Realtors, appraisers, an attorney, title people, contractors, you need boots on the ground going out the gate to go at this in a business manner and trying guru crap. That, or know every step of what to do in each area.
If you have no experience in doing repairs or overseeing them, then stay out of that end of it, I assumed you knew what repairs were really need to market the deal, I'm thinking now that may not be the case.
We could say do XYZ contracts, but then the next question would be how do I do that, where do I get that agreement, how do I do this, how do I secure my interest, make a note and deed of trust.....
time is passing, call the Realtor, buy more time to sell with a loan if you like at a title company or attorney, and if it doesn't sell, you may need to buy it since you have a second mortgage.
You have a friend facing foreclosure and you want to use them to learn guru stuff and profit off the deal? Just ask your "friend" to pay you for cleaning the place.
Everyday it's not on the market is another day it won't sell and a day closer to foreclosure for your friend.
If you have funds to bring the bank current, then you have a few hundred bucks to see a local attorney and get someone who can help that doesn't need to learn.
My very first words were to the caution of getting involved, the reason they passed those laws was that amatures are out there with guru stuff who knew very little "trying to help" while attempting to profit off folks in foreclosure, like your "friend".
Thank you, Bill.
I recommended that the owners list ASAP and sell as-is. I am helping clean. Not expecting anything extra for me unless I help make the loan current.
I do have a lot to learn and will explore the Investor Basics and Foreclosure Investing forums on the BP site. I’m looking forward to joining you guys in the investor arena soon. I appreciate your feedback!
Let us know what it gets listed for, and finally what it sells for. Would be nice to know the outcome.
Will do.
There are a lot of good answers on here, but bottom line is this deal is probably going to be more than you can handle by yourself. I am a realtor who works for investors and I hand all my wrap mortgages (owner finance) over to a partner because they have spent thousands on education and a lawyer who does nothing but this. There is room for you to profit without taking all their hard earned equity. I have a few names you could call to have this handled properly and you also have more options than a wrap, too. Message me, I'll do what I can to help you out.
Richard, I am in the Denton area. If you can contact me I think I can help.