Possible deal? Advice?

Question

I have met someone that currently lives in their home but has to get out from under the mortgage - adjustable rate is eating them alive!  They have started talking with a realtor and their lender about short sale.  They are going to short sell and then find a rental long term - Any ideas on a creative way for me to get into this deal and help them stay in their house by renting it back to them?  Is it basically that I buy the short sale and then rent back to them or is there some other solution?

Jeff Fairchild · Answer

Curt, sometimes you can't do a wholesale deal without doing a short sale.  I don't think wholesalers ask themselves whether they should be doing short sales or wholesaling each deal.

Brandi T · Answer

Thanks for all the input - I probably won't pursue this property.  This is such a great forum for information!

Will Barnard · Answer

I wouldn't say short sales are a waste of time. In fact, they can be quite profitable. Granted banks take forever to get back to you, take forever to approve things, and quite often the right hand has no idea what the left hand is doing.
That said, in time, they can be worth the hassle and have better payoffs then a wholesale. But wholesale deals can be done quicker, with very little to no money out of pocket, and with very little or no risk, if done properly.

Curt Davis · Answer

My suggestion,

Dont waste your time doing a short sale. It is so much easier and faster to do a wholesale deal.

Douglas Christian · Answer

Totally agree Mike.  Never rent back to the tenant who has lived in the property, under any circumstance.  Get the discount and if you want to help them, then put a deposit down on a house or a apartment.

It jeopardizes you if something were to go wrong and you then try and evict them, now they can claim that you worked something out with them and that will not look good on you.

Keep it simple, if you get the short sale done, at least you save there credit from being trashed.

Michael Rossi · Answer

If they can't afford the mortgage on a property, they certainly aren't going to be able to afford the rent on the same property, even if you buy it at a discount.  I would suggest buying the property at a HUGE discount and finding your own renter.

Mike

Demos Loizides · Answer

Be careful about doing leasebacks. In some jurisdictions they are or will soon be illegal. There are a lot of foreclosure rescue scams involving leasebacks.