Seeking Advice for Unique Opportunity Presented by my Father

[Greg N.]

Today my father presented a real estate deal to me that he wanted me to look further into. He was speaking with a long time colleague that is in a sticky situation with her current home in Prince George County, VA. He was told that a good amount of money could be made. I asked her to send me some more information about the deal. She emailed me the following:

"Basically I want to force my mtg co to approve a short sale. Then you could purchase at the short sale price. I would rent the house from you for the legally required period of time then purchase back from you for an agreed upon Amount in advance. This requires trust on my part, but I trust your Dad.

Refinancing is not a viable option as it does not restructure loan, and it would only decease my rate by 1% saving me $58 a month. I do not qualify for any programs currently available for homeowners up side down because I am not experiencing financial difficulty. My only options are (1) short sale house to get from under or (2) stop paying the mortgage in order to qualify for programs thereby tanking my credit.

I have already ordered a CMA. Hope this explains my thoughts."

I have already emailed her back asking for details about the home as well as started looking into Prince George County laws regarding leasing and home sales.

Based on the email above would you run for the hills or consider looking deeper into this? I obviously do not want to engage in anything illegal. Just as a side note, I own a real estate management company which could purchase and rent out the home to this individual.

Any advice on this would be greatly appreciated. I have been around the forums for a few years but haven't seen anything related to this scenario. I specialize primarily in property management and am not to familiar with the logistics of such a deal.

Thanks in advance for any insight!

[Steve Babiak]

Originally posted by Greg Noble:

... My only options are (1) short sale house to get from under or (2) stop paying the mortgage in order to qualify for programs thereby tanking my credit.

...

Not going to comment about the word "only" in there ...

But option 1 is going to damage credit score also ...