Getting the money for arrears

General Real Estate Investing
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Getting the money for arrears

Antonio Bodley
AL · Member since 2010 · 522 posts · 31 votes

What is the better way to come up with the money to pay arrears on a pre-foreclosure if I have no money out of pocket? I am thinking maybe just stick to wholesaling to build up funds before jumping into investing in pre-foreclosures with no out of pocket capital. OR I could find a partner who would bring in the capital to payoff the arrears. If I do the latter, how and where do I find a partner who would agree to this? And should I only focus on pre-foreclosures with equity even if my exit strategy is to install a lease option tenant?

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  • Nicholas FloydBusiness Member
    NY · Member since 2026 · 198 posts · 73 votes
    7h

    I’d look at the deal first before worrying about where the money comes from. If there isn’t enough equity after the arrears, closing costs, repairs, holding costs and a realistic exit, bringing in a partner may not solve the underlying problem.

    If the numbers make sense, a capital partner is definitely an option. You can also explore business lines of credit, 0% APR business credit or other business funding depending on your credit/business profile, but I’d only leverage what the deal can comfortably support.

    And yes, even with a lease-option strategy I’d still want enough equity and multiple exit strategies in case Plan A doesn’t work. Definitely do your own due diligence and have title/legal professionals review the pre-foreclosure situation before putting money into it.

    Building some capital through wholesaling first isn’t a bad approach either—it can put you in a stronger position when the right pre-foreclosure opportunity comes along.

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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 272 posts · 89 votes
    4h

    @Antonio Bodley With no cash or reserves, slowing down may be the smartest move. Pre-foreclosures can involve more than the arrears—legal fees, repairs, taxes, insurance, closing costs, and a short timeline can quickly change the deal. Focus on properties with enough verified equity to cover every cost and still leave a meaningful safety margin, even if the plan is a lease option. If bringing in a partner, present a specific deal with conservative numbers, a clear exit, defined roles, and written terms explaining how the partner is secured and repaid. Local investor groups, experienced landlords, attorneys, agents, and existing business relationships are better places to build those connections than asking strangers to fund an idea. Wholesaling or partnering on a few deals first can be a good way to build capital and credibility. Most importantly, have a local attorney review the foreclosure timeline, title, contracts, and any lease-option or fundraising arrangement before money changes hands.

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    • Antonio Bodley
      OP
      AL · Member since 2010 · 522 posts · 31 votes
      2h

      That is a great idea. I hear pre-foreclosure home owners are the most motivated to sell. I am looking for motivated seller leads right now.

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