Sacramento Pre-foreclosure - need help!!

19 Replies

95626/Sacramento/Elverta

Looking for help to be able to walk away with no debt, no bad credit - any ideas or investors interested in taking over if numbers work for you!

Currently waiting for BK to be dismissed, as soon as it is house will go into foreclosure - estimated date of June 6 for BK dismissal

Do not have exact figures but best estimate, we owe @ $220,000 - first is $162936, + back pay of $4000 (e) 

2nd is estimated at $40,000 including all back payments, penalties & fees

1st mortgage payment is $1287.95 PITI. 2nd unknown

House sits on .86 acres - (e) $200,000 for property only, 

       electric - city; water - city; there is a well but not used, condition unknown; RV clean out

        septic; gas - city meter; 

House is 1987 Modular, 24 x 57, two beds + office, 1 full bath & one 3/4 bath, attached single car garage

Roof replaced 5 years ago

House is livable but needs work

Extras:  outbuildings

Tenants: 1 person living in travel trailer, pays $500/mo + 1/5 of utilities - would like to stay

               1 person renting one bedroom, pays $450.00/mo, has lived here for over 6 years

If the house is worth $230k and you owe $220k you may be able to just sell it as a normal sale so your credit won't get hit like with a foreclosure.  With total income of $950/m I don't see an investor wanting to buy it for $220k and margins look to slim for flip.

Your credit is already shot with a pending BK dismissal so that endeavor is out the window.

  • Unknown 2nd lien payment doesn't help
  • Modular doesn't help
  • Deferred maintenance doesn't help

There are no upside potential worth getting into the deep end of the pool with what you've disclosed so far. With more detail? Maybe that would change.

You have no liability beyond the foreclosure. No one can come after you in California for the deficiency after sale. Live in it for free for six months until the foreclosure is complete and then move on with your life and rebuild your credit. It doesn't sound like you are living in it so, if that assumption is correct, yeah, instead of staying for free for six months, again, just move on and start the rebuild. No one is coming after you.

So a couple of things you must Verfiy are find out if the modular was assembled in the factory and then brought straight to the subject. Have you verfied the recorded 433a and I would for sure recommend now although it may be to late to find and agent to help you with a short sale which this one sounds like it has the makings. I may have some to recommend to you

Let a pro get in on this thread!

Not knowing if Mr Redmond has a manufactured home or a true crane  set modular is two major different situations. 

If it's a manufactured home ( HUD) label then he is probably upside down in his mortgage and a short sale would be the way to go.

If his home is a true crane set modular that can get a good stick built appraisal , then he could market it to the right investor and not take too much of bath on it and keep his credit score good. 

California is really different , because I have seen some Mfg Homes bring top dollar in the right location. 

Mr. Redmond , get you a good RE agent that knows Mfg Housing before you default.

Never give up just adapt ....

@Joshua Redmond I think it would be wise to get a few opinions on value from experienced Realtors in the area before you spend a ton of time trying to avoid a short sale. 577 Los Garcia Ln MAY be a comp at $195,000 (manuf on 3 acres) but the location with the zip may make a difference. 6929 5th Ave is a stick built listing in adjacent Rio Linda and appears in good condition on a half acre at $247,500. It would be challenging to accurately estimate value for your property type/condition in this neighborhood without at least a drive by.
I am not selling homes at this time - message me if you need any Realtor or appraiser recommendations for the Sacramento area.

@Joshua Redmond

I really dont care if you are upside down or not, you can sell this house and not lose your *** or your credit (any more than the hit you have already taken)  

You will need a decent RE attorney to make this happen but you can sell your house to someone as a work for equity deal. You will sell it to someone who has less than stellar credit with a lease-option device, attached to an amortization table that parallels your current mortgages. You retain the deed, held in escrow by your attorney. You also force your buyer into credit clean up with the stipulation that once their credit is acceptable to a traditional bank that they will cash you out within X months of that happening.

In your sale/lease contract you will stipulate that the buyer must complete repairs by a schedule agreed upon by both of you. You will target either a handyman or someone with a good income and crap credit.  

Sell the house on craigslist with the title rent to own and buyers will line up for you, choose the best one.

to your success

Josh 

Originally posted by @Josh Caldwell :

@Joshua Redmond

I really dont care if you are upside down or not, you can sell this house and not lose your *** or your credit (any more than the hit you have already taken)  

You will need a decent RE attorney to make this happen but you can sell your house to someone as a work for equity deal.  You will sell it to someone who has less than stellar credit with a lease-option device, attached to an amortization table that parallels your current mortgages.  You retain the deed, held in escrow by your attorney.  You also force your buyer into credit clean up with the stipulation that once their credit is acceptable to a traditional bank that they will cash you out within X months of that happening. 

In your sale/lease contract you will stipulate that the buyer must complete repairs by a schedule agreed upon by both of you. You will target either a handyman or someone with a good income and crap credit.  

Sell the house on craigslist with the title rent to own and buyers will line up for you, choose the best one. 

to your success

Josh 

What's a real estate attorney gonna do for him in California? They aren't going to stop his foreclosure. They aren't going to get him a loan mod. They aren't going to do ANYTHING for him that he can't do for himself for free. In California, us lenders are allowed to completely bypass any possible alternative to foreclosure and go straight to foreclosure without further communication if the borrower engages an attorney for the purposes of stalling a foreclosure. If not for the foreclosure stalling, are you recommending an attorney for the purposes of a lease option? Is that lease option you are proposing going to include bringing the loan completely current? If the OP can't pay the loan payments, were is he going to get the money to pay for an attorney to structure a lease option that anyone can do for free with the same protections by doing a little research?

Why is anyone with half a brain going to enter into a lease option without knowing the payment or the payoff on the 2nd lien? How much deferred maintenance is that buyer going to have to take care of and pay for on top of bringing the loan current and making monthly payments? And anyone that can pony up the money that is past due (that is getting bigger every single day), just to bring the loan current and stop any potential default can more than likely get into a property without an unknown default second lien amount or any significant deferred maintenance.

Last but not least, let's not forget that he can't even list the property for sale until his bankruptcy is terminated. The property is not currently under his control. While in bankruptcy, he must motion for and receive permission from the BK trustee to sell the asset

.

@Josh Caldwell , we are not an atty state and no escrow holder here will hold an original unrecorded deed.   

@Joshua Redmond , send me the address and I can run it to see if there is a 433 recorded or not, then we will really know what we are working with.

It is not hard to short sale this property, especially since there is such a small margin. It is not hard to pause foreclosure proceedings to buy some time, either.

Maybe an investor could pick it up "Subject To" under the right terms, with bringing the loans current through the transaction. I have done this before, it can work.

@?Ron S

The key to this is to make the loan current, without that it would be a silly waste of time.  That is also how you stop the foreclosure.  

There are prox 80% of this US population who cant get a loan from a bank, so when you open this house up to a non traditional sale, you open the flood gates to a herd of buyers who will buy an ugly deal.  They will jump on this deal because it is their one gateway to home ownership. Of the applicants, you will only select applicants who have enough non-refundable option consideration to cover the past mortgage default. 

If there is significant deferred maint. then you make sure that you put specific repairs in the contract with the buyer and attach a time schedule to those repairs.  You also make sure to add periodic inspections into the contract so that you can assure they are keeping the place in good condition. Your lawyer will help you make this happen.  

Pay attention because this is where the RE lawyer comes in.  That lawyer acts as a conduit to keep this deal alive and to keep everyone safe in the deal.  The attorney keeps the deed in escrow so that title doesn't transfer until the entire debt both 1st and 2nd are paid off, that way you dont have to worry about triggering due on sale clause. The attorney also monitors payments, so that if there is a disruption in payment, that same lawyer can initiate eviction.  The eviction is done as if the tenant buyer is a tenant because they are not on the deed. 

Im not guessing, I have actually done this.  When I work pre-forclosure lists, this is exactly how I buy houses before people go down the drain.  All the buyer is offering is debt relief and to save the sellers credit.   The seller is offering a chance to buy a house without having to qualify for a bank mortgage.  If done correctly (with a lawyer) then both parties get what they want. 

Originally posted by @Josh Caldwell :

@?Ron S

The key to this is to make the loan current, without that it would be a silly waste of time.  That is also how you stop the foreclosure.  

There are prox 80% of this US population who cant get a loan from a bank, so when you open this house up to a non traditional sale, you open the flood gates to a herd of buyers who will buy an ugly deal.  They will jump on this deal because it is their one gateway to home ownership. Of the applicants, you will only select applicants who have enough non-refundable option consideration to cover the past mortgage default. 

If there is significant deferred maint. then you make sure that you put specific repairs in the contract with the buyer and attach a time schedule to those repairs.  You also make sure to add periodic inspections into the contract so that you can assure they are keeping the place in good condition. Your lawyer will help you make this happen.  

Pay attention because this is where the RE lawyer comes in.  That lawyer acts as a conduit to keep this deal alive and to keep everyone safe in the deal.  The attorney keeps the deed in escrow so that title doesn't transfer until the entire debt both 1st and 2nd are paid off, that way you dont have to worry about triggering due on sale clause. The attorney also monitors payments, so that if there is a disruption in payment, that same lawyer can initiate eviction.  The eviction is done as if the tenant buyer is a tenant because they are not on the deed. 

Im not guessing, I have actually done this.  When I work pre-forclosure lists, this is exactly how I buy houses before people go down the drain.  All the buyer is offering is debt relief and to save the sellers credit.   The seller is offering a chance to buy a house without having to qualify for a bank mortgage.  If done correctly (with a lawyer) then both parties get what they want. 

@Josh - I think that's great theory but not very practical. Too many moving parts for your perfect storm scenario to work. Maybe you made it work but this isn't PA. You haven't answered the issue with the 2nd (I paid attention...remember? There are two loans you are dealing with, not just one.) It was charged off and the balance is unknown so how are you going to negotiate a sales price on a balance you don't know about? Who's going to pay the attorney to baby sit this situation? Is that attorney going to work this fantastical scenario of yours for the next 25 years or so until the loans are paid off for free?

Attach a specific repair punch list with a time schedule for completion? Who's going to do the repairs? Who's going to pay for the repairs? What if that kitchen faucet leak turns into a major plumbing leak? How's that structured?

The buyer doesn't get the deed until the first and the second are paid off? Who in their right mind is going to wait for 20 years (Or more) before they can take possession of the deed? They don't get the tax write off? Really? You think that people are that desperate and stupid? Maybe you didn't really mean "until paid off" and instead, meant until the lease option is actually executed but if that's the case, there is a big danger in the lack of detail and specificity in your pitch.

Where are you getting your statistics from? 80% can or can't buy a home? According to Wikipedia, as of 2014 67% of homes were occupied by their owner (63% as of first quarter 2016 according to US Census Bureau data). Does that mean they can get a loan from a bank? Who knows but apparently you do. You apparently know of the millions that may or may not be able to get a loan but we will never know because they don't apply for one. Or, you've apparently filtered out those that applied but were denied not because they couldn't get a loan but, just couldn't get a loan for the amount they wanted or for the property they wanted. I would like to purchase the spreadsheet and algorithm that you have developed to calculate and determine who can get a loan from a bank.

I get your point Josh. Not my first rodeo but I wouldn't paint a broad brush stroke from your get rich quick scheme to apply it to all situations where a borrower is in default. This scenario isn't going to work the way you are suggesting, in my opinion. Again, yeah, you may have done it and may do it everyday. That said, why don't you buy his house? Sounds like you have it all figured out. Save his credit (Save his credit? Did you not read his post? he's still in bankruptcy), get your free attorney to manage this for decades, fix the unknown deferred maintenance and pay off the unknown arrears for the second and the unknown balance and enjoy the profit? Oh, and do it without the approval or permission of the bankruptcy trustee because you do this all the time.

This is not a theory and people all across America are doing it, this isnt a PA thing.  Just because it isnt in your wheel house doesnt mean that it doesnt work.  I can do it and so can many competent real estate investors.  

You have two choices here. you can either do it my way or you can lose on this deal.  I consider it immoral to lose money on real estate, but the choice is yours.  

As real estate investors we are paid because we know how to do things that the average person can not do I could get paid to do this, and so can you. I have laid out the blueprint. Get to your local REIA group and find the lawyer who the investors use, that person will handle all the paperwork and keep you legal.

To your success

Josh 

Originally posted by @Josh Caldwell :

This is not a theory and people all across America are doing it, this isnt a PA thing.  Just because it isnt in your wheel house doesnt mean that it doesnt work.  I can do it and so can many competent real estate investors.  

You have two choices here. you can either do it my way or you can lose on this deal.  I consider it immoral to lose money on real estate, but the choice is yours.  

As real estate investors we are paid because we know how to do things that the average person can not do I could get paid to do this, and so can you. I have laid out the blueprint. Get to your local REIA group and find the lawyer who the investors use, that person will handle all the paperwork and keep you legal.

To your success

Josh 

Blueprint? I like that. I'll quote you the first few times I use it then take it as my own.