Abita Springs , LA · Member since 2017 · 80 posts · 43 votes
Hello. I want to buy my neighbor's property. I have spoken with him over the past several weeks. He will file for bankrupcy in the Spring and stop making payments on his home while it goes into foreclosure (to save money not making mortgage payments)
How can I prepare to snap up this property when it gets near getting foreclused in 9-12 months?
Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
3y
@Pablo Mendez why not buy it now sub to. He is going to lose it any ways and sounds like has decided that it is gone. If he is current on payments now get it under contract to buy at a date in the Spring before he files for bankruptcy, and give him some walking around cash to get into an apartment as that will be near impossible after bankruptcy.
Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
3y
@Pablo Mendez why not buy it now sub to. He is going to lose it any ways and sounds like has decided that it is gone. If he is current on payments now get it under contract to buy at a date in the Spring before he files for bankruptcy, and give him some walking around cash to get into an apartment as that will be near impossible after bankruptcy.
@Pablo Mendez why not buy it now sub to. He is going to lose it any ways and sounds like has decided that it is gone. If he is current on payments now get it under contract to buy at a date in the Spring before he files for bankruptcy, and give him some walking around cash to get into an apartment as that will be near impossible after bankruptcy.
We were working a Subject To. I had everything lined up. That's when he told me he will file for bankruptcy. I then talked to a bankruptcy lawyer that said he filing for bank would mess up the Subject To, bankruptcy person would reverse the title transfer or make me pay the equity into the bankruptcy funds.
Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
3y
@Pablo Mendez take it over with an assumption then. Contact lender with the seller and let them know he isn't going to be able to make payment but you want to assume the loan. Go through the process if they push back let a payment be missed and call them back see if they are interested then.
If it goes to foreclosure your chances of getting it are reduced as now you will have more competition.
Real Estate Broker · Jacksonville FL & Middletown CT · Member since 2008 · 1k+ posts · 632 votes
3y
Having him sell to you now will end up being a problem during the bankruptcy, as they will scrutinize all his recent home sales, and selling to you under market will be a problem (subject to, or not). Definitely for him. Maybe for you as well.
If he can stay current, I would wait the BK out then take subject to (assuming the loan is worthwhile). The loan will be discharged, but as long as the note is current the lender will do nothing but continue to accept payments, eventually releasing their lien at payoff. If he can't stay current, you can always pay the back due in a lump sum to bring the note current after the BK.
However every state has a different amount of equity the homeowner is allowed to "keep". If there truly is 50k of equity in this home, it may be a problem for his chap 7 (depending on your state BK laws).
One more thing. If there is 50k of equity today, and he will stop making payments soon, by the time the bk is over, there may be zero equity left.
Actually the more I think about this, I want to say pass for now, til after the BK. The BK has too much potential to cause a lot of issues for this possible deal, and the market is headed down. You don't even know what the home would be worth after all this. If he files in spring, the bk may resolve in a few months at the earliest. Who knows what that house will be worth a year from now or what the loan balance will be by then.
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
With a house in foreclosure, you need to act fast! Don't let your circumstances slip away. Do it now and take over his payments before he has the chance to file for bankruptcy. It's up to you to protect your interests and get the deed transferred into your name. Your future prosperity depends on it. So don't wait - seize the opportunity today! Make sure you get the deed in your name as soon as possible. Don't let foreclosure ruin your dreams of home ownership. Act now and take control of your future. Your success is in your hands!
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Pablo Mendez
This is mind blowing
if he sells now he will get the equity in the home which looks pretty good.
If he files BK and waits to sell it the lender will tack on legal and recoverable costs and have it sold as a reo at auction and he won’t get anything but a few months saved of mortgage payments.
Hello. I want to buy my neighbor's property. I have spoken with him over the past several weeks. He will file for bankrupcy in the Spring and stop making payments on his home while it goes into foreclosure (to save money not making mortgage payments)
How can I prepare to snap up this property when it gets near getting foreclused in 9-12 months?
We don't know enough information to figure the best approach.
Is the house his only property and does he live in it? Is there another person on title as well?
What kind of loan is it? Conventional, VA, FHA, USDA, Jumbo, Manufactured?
Is it a national lender or a local lender?
Why is he waiting until spring to file? What changes in the spring?
Will he be filing chapt 7 (usually runs 4 - 6 months) or chapt 13 (can take up to 60 months)?
Is he employed?
Does he have any liens against the property, other than the loan?
Is he current on his mortgage payment and property taxes?
Is his filing on advice from an attorney or is he just thinking this through?
Is there deferred maintenance on the property that you aren't aware of?
It's too involved to get into all possibilities but having the answers narrows things down some.
As a general idea and not knowing enough of the particulars, nor his income situation nor his personality nor his goals; (there are other ways to do this without bankruptcy), if he insisted on filing I would have him file to dump the credit card debt and car debt, and reaffirm the mortgage debt so that he keeps the house which he can then sell to you.
If he files, during bankruptcy, and for 6 months before and a few months after, he can't buy or sell without court approval (yes, they can claw back a sale) and in the case of an existing mortgage, he also needs the approval of the lender. It gets complicated.
Why is he going nuclear? To me, it sounds like he doesn't need to file bankrupcty based on the numbers but as I say, there may be other issues inovlved.
If you take this one Subject To, depending on the circumstances the lender may be ok with it or maybe not. The Trustee will have an appraisal/BPO done to see if there is enough money to apply to debt payoff by forcing the sale of the house. All kinds of things go on in the background in bankruptcy as required by the bankruptcy code.
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