We are fairly new to investing and we are currently working on wholesale deals. We received a call from a potential client that is in pre-foreclosure and would like to work with us, however, the situation is a bit odd. She understands that she will not be keeping the property since she cannot recover from the passed due payments, but she has been back to work for some time and wants to know if there was anything we could do to keep her in the home as say a renter since her income is quite good and she was behind due to medical issues.
I know there are investors that will help sellers find a new home but not sure on the inner workings of that or if there is anything else we can offer her.
Would this be a short sale? Or is there enough equity that your purchase price would be able to pay off the loan? If its a short sale the answer is almost certainly no. The lender taking the short will require the seller receive no benefit and staying in the house would be a benefit. If its not a short, you could let her stay. If you do, it should be strictly a simple lease. Do not do any sort of lease/option or rent to own. Those can be viewed not as a sale and lease back but rather you making a loan to her and the rent payments are considered the loan payment.
Its called a lease. Once you purchase the property, you have resident sign a lease with you. However, if you are trying to wholesale the deal, I imagine it would be difficult to find an investor willing to do this. Most believe it is a bad idea...fewer will agree to do it. Your best bet is to convince her to move.
Does the home have equity? If so, then there may be a way to work something out that makes sense for all parties. What is the amount owed and what is the property worth? What is the rent in the area?
If the home is a short sale people are not supposed to do rent backs.
Thank you, everyone, for the advice. She was able to get her attorney to complete her chapter 13 paperwork and will follow up with us once it is complete. I knew about leasing but had several people tell me that they would never do it, so I was curious as to other opinions. If she had defaulted and never made another payment, I would never have considered asking but she had paperwork that the payments were being made each month once she returned to work, but the mortgage company was holding it all in escrow and would not apply it to the loan since it was not the full amount.