Opportunity or BUST? Is this a possible deal?
Hey everyone,
Bare with me for this long story... I just want to see what is possible and not possible with buying this home.
I am currently in a negotiation with a previous homeowner who still has his name on the deed of the house. This homeowner went bankrupt 5 years ago and has been collecting rent on his house for about 5.4 years without paying the mortgage or any taxes.
In this time he has been running Airbnb, Vrbo, and Holiday rentals. During this collection of payments, he has not paid a single dollar since his bankruptcy.
During this time his original note of 650,000USD has now accumulated over 500k+ in unpaid interest + payments.
This owner believes the deed to the house was lost by the bank and that is why they have not responded to his appeal in court to cease the home. Alongside this, we have a situation where COVID has also impacted courts/big businesses such as banks.
Now the owner said he is willing to Short Sell. BUT, I don't think he actually can after looking further into what he has control over. Now his name is on the title of the house but even if this was lost we could, in theory, go get a new one from a titling office.
Is he just stringing me along to pay more rent until this thing is taken? Or is it possible I could buy the house before it gets auctioned?
I know that we do have the moratorium working to give him more time to collect rent and give the current tenants a place to live. My question is, how long could that be if it has been 5 years of not taking it? Could he just ride this out for another year stringing me along thinking I could buy the house until it's taken away? OR can I actually have him short sell it to me and get a killer deal.
***Note: This guy is a friend of mine and is willing to Short-Sell but he doesn't know where the deed is or what the bank is trying to do. They have no contacted him since his appeal in court on the foreclosure asking for the deed/title paperwork.
Thanks!