Creative Solution Needed to Help Friend
So I have a bit of an interesting situation. My friend’s mother lives alone in a house that is way too big for her, she needs to get out. She is having trouble making her mortgage payments and the condition of the home is slowly getting worse. In order for it to sell it needs some money put into it, which she doesn't have. She is a little behind on her mortgage, how much I don’t know. I have an appointment tomorrow at 3 to talk with her. I would like to find a way I can help her out of this situation.
One of my ideas would be for me to do the renovation and carry that cost until closing. How I in vision this working is that she would retain ownership of the home and give me permission to do the Reno. At closing she would pay off her mortgage and pay me for the work that was done. I make profit on the Reno and she pays off her mortgage so it is a win win.
I know it won’t be that easy and I don’t even know if this is remotely possible until I find out what she owes on the property.
My question is if we were to do this, where I pay for the Reno to get the home sold, how does it work at closing? What is the mechanism I can use to get paid at closing, for the work that was done on the property? Would I have to put a mechanics lien on the property to make sure I get paid or is there another way? Could I just have my lawyer draw up a contract dictating that I get paid at closing?
I would like to have some idea of how this works before I go and see her tomorrow.
Any help would be appreciated
Steve
How is her credit? How about your friend's, is he/she willing to help?
@Account Closed I don't know what her credit looks like. If she is behind on her mortgage payments I imagine it isn't great.
My friend is in college currently and is not in a position to help her out.
Hey @Stephen Talaber ,
Here is another conversation about securing your position in a joint venture. You'll want to find out from a lawyer or local investor what paperwork is standard in your local area.
http://www.biggerpockets.com/forums/48/topics/104807-joint-venture-strategy-advice
@Michael Olesky Thank you for the link that was very helpful
It looks like I might have to talk to a RE attorney about this. Maybe he can draw up some type of Joint Venture Agreement
Record a 2nd mortgage.