Rental Property Investor · Lexington, KY · Member since 2012 · 115 posts · 64 votes
I have a buddy that unfortunately is losing his house to foreclosure. I am a bit confused (I think he is too), he owns it in full (no mortgage).. He did "rent to own" which ended badly and I believe the foreclose will someone clear the title (he says the past tenant still has rights to the property, but is long gone). He says he believe he will have the option to buy the property back after the foreclosure for next to nothing. I asked him if he would just sell it to me and he said is ok with that, but the title has issues. He also said he would be open to seller financing. This is a very motivated, out of state owner. This could potentially be a great deal, but I am unsure on how to proceed with this... If you guys were in this situation, how would try to cash in on this? I am a newbie as well as this seller. Please bare with me. :)
You, and more so your buddy, need to talk to a local foreclosure attorney. I believe you misspoke when you said he's "losing it to foreclosure". He is the one foreclosing against the tenant/buyer (his mistake for not knowing to set it up as a lease with a separate option). It may not be an actual foreclosure proceeding, it may be an "ejectment" type action, which is somewhere between a foreclosure and an eviction. Do not pass go, or do anything else without talking to a local real estate attorney.
@Zac P. you are not only confused, you are confusing. It is difficult to understand exactly what is happening.
You say your friend owns the house free and clear with no mortgage. Then who is foreclosing?
You said he did rent to own. Did you mean he was the tenant with the right to buy the house or was he the owner who rented it out to someone who would eventually buy it from him?
I would number one try to get an understanding of exactly what is happening. I guess the main question is he losing the house or is he getting it back?
Personally I love the complicated stuff because have less competition. I can work through the complexities that others can't deal with. That is tough to do when you are new and still learning the basics.
Find out more about what is happening and come back with clarification. Good luck - Ned