Need advice with owner financing and foreclosure ASAP

1 Reply

Hello all,

Kind of need urgent advice on this as I'm seeing this house tonight at 7:30pm. So thanks in advance.

I have a two part question:

Question 1: Have you ever bought a house from someone with owner financing? If so, how did you structure the deal/contract? I have a lady offering to sell me a house for 148k, 4% fixed interest, 15 year note. The ARV is $247k (literally same model house 3 doors down that was renovated). I just want to know how to structure a deal and what issues I may run into with the title of the house.

Question 2: It appears that this lady got served a foreclosure notice, so I'm guessing she is a few payments behind. That alone gets my spidey senses tingling, because how could she be offering owner financing when she doesn't even own the house outright? Maybe I'm wrong looking at it that way. I'd guess she'd just take my payments and make her mortgage payments each month and maybe keep a little off the top as profit. My main concern though is, is it even possible/wise to strike a deal for owner financing when a home is in the beginning stages of foreclosure?



I'd be very wary of this deal and I've done about 45-50 seller financed deals, always as the seller, never as the buyer! Back when I was an active investor a lot of people would go into deals on a "contract for deed", I never would do that, then or now. I've even had people tell me that "it's perfectly safe, you can even get title insurance on it". I never checked to see if that was even true because I would never buy on a contract for deed, which sounds like what she's offering. 

My reason for this is simple, when I was in law school (dropped out, bored and realized I was never going to practice law) an experienced RE attorney and a few of us were having dinner and talking about a lot of aspects of property contracts. I think there were a couple of RE investors at this dinner and someone brought up contract for deed and whether it was a good idea or not. The attorney told us a good way to answer the question before going into this deal would be to ask our attorney the following;

"I'm going into this deal. What if a few years down the road the seller runs afoul of the IRS and they file a lien against all of his assets. How much will it cost me for you to protect my interest?" With that answer you can easily evaluate this deal!

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