I am very new to the investment game. I recently got a lead for a property that is in lieu of foreclosure. The seller is an elderly mother and daughter that do not want the property. The mother has not been paying on the property she was informed by the bank that the amount owed is over 315K (2 family in the Bronx NY) they were considering handing over the keys to the bank until I stepped in. I spoke to the daughter today and she told me that the bank wants to appraise the property because it has not been appraised in years. They told her once the appraisal is done they will give her paperwork for her to sign so I can talk to the bank in regards to the property.
How do I negotiate this deal so that I can fix flip and make some money?
If they are exploring a deed in lieu, you are going to be cut out of it as the borrowers will be deeding the property back to the lender. There is no deal for you if that is what's going on.
thanks the owner is going to allow me to negotiate with the bank hopefully I can workout a deal
Usually when a lender does a lieu of foreclosure , the owner has signed is done. Only
thing to do is trying to negotiate a buy out .
Now if the owner hasn't signed you can negotiate usually the lender will pay the owner
for the keys and move out without having them be evicted.
Is there any equity in the property?
If not don't bother.
If yes then write a check for a couple thousand dollars for a QC deed and an affidavit that allows you to contact the bank and basically take the position of the old owner. Once this is all done request a payoff and cut the bank a check.
yes there is equity in the property if I do a complete rehab. The property can range from 475k to 550k
Then I would recommend just getting a QC deed and an affidavit. The affidavit isn't even necessary if you are just going to pay it off, it just makes the transaction much smoother. Basically you throw the previous owner a couple of bucks to stay out of the way, you are subject to the mortgage and will have to pay it off to avoid anymore accruing interest/pending foreclosure action. Not a big deal pretty easy transaction in reality. If you can convince the previous owner to take $1,000.00 for the QC deed I would recommend getting that done ASAP.
I just came back from vacation so I have to put it into high gear. thank you guys for all the help can the title company draft the QC Deed or does it have to be my attorney?
@Christopher Griffith I don't think you have a clear enough picture here. There is no such thing as "a property that is in lieu of foreclosure". If you mean the bank is considering accepting a "deed in lieu of foreclosure", that is possible. You also don't know Exactly what the total pay off is, you need to see a tatement from them Enders,and verify if there are any other liens/taxes due. Also, what would be the cost of rehab? If you're not sure of all these things, and your exit, don't take the deed and then leave these people hanging in Foreclosure.
I reached out to my title company and the Property is in forecloser. I was told by the title company that I must find out who's the attorney dealing with the forecloser she also informed me that I need to find out how much is the payoff and all fees.
Would I be able to negotiate the payoff amount with the attorney.