Question about Pre-foreclosures
When you buy a pre-foreclosure do you have to buy it cash or get a loan or you can get it on terms? Can you do "subject to" with Pre-foreclosures?
Hello Fili! The best way will be to do owner financing wherE you just eliminate the closing costs and Agent comission.
Sorry about that. Another good reason is that you won't have to qualify for a loan. You will get a deed that property. You can show the owner how he will benefit from that transaction by getting more money for the home and by spreading his income for tax purposes and that you can pay him in full upon your closing date. Hopefully he has a low interest rate om his mortgage and you can charge more than that each month on the lease to a third party that will pay that higher rent payments while you still are trying to sell.
Just be creative to satisfy both parties and help him with a problem he might have. You may have to get a secondary loan to satisfy his cash needs with a down payment if he needs one. Hopefully it has minimal make ready expense. You can sell to a "qualified" Buyer and charge that person a non-refundable down payment of 10% and save them some money instead of paying 20% to a bank. You could offer them a Lease Option through your own financing, with them being responsible to do the maintenance and be willing to take a little higher interest rate for a lease period of two or three years before they get the purghase opportunity at a fixed price. You can charge a higher interest rate too on the purchase loan you provide. Of course it will matter how motivated the seller is and how he feels about you. You will get to maintain ownership with the deed until they purchase. Good luck to you!
Hello again Fili! I forgot to answer your questions. You do not have to pay cash on a pre-foreclosure unless the seller requires it. It's negotiable. Yes, you can do a subject to just don't tell the existing financial company or they could use the due on sale clause and make you qualify but if you take over the payments and pay on time they will rarely enforce that. Let the owner be aware of that. Again, it will matter how motivated they are.
Best wishes!
If the property qualifies for financing then you can get financing. Yes, sub-2's are okay, but obviously you don't want to do this on an underwater asset and if you do a sub-2 you need to ensure you do it properly to protect yourself and borrower as these transactions are very sensitive. Likely should get an attorney involved.