OfflineHey DG Family. I am sooo excited I am about to burst and not quite sure where to begin. I think my head is reeling from all the awesome information I'm still trying to comprehend. I have read both books BARM (going to read it again) and the newest Profit from Real Estate Right Now!. FANTASTIC READ; I LOVE THEM! THANK YOU SO MUCH DEAN. YOU ARE AN INSPIRATION AND I AM TRUELY GRATEFUL TO HAVE FOUND YOU.
I have been looking to get into real estate investing the correct way, and boy did I find my motivation. To be honest i've never read a book so fast in my life, it was literally glued to my hands. I read it in 2 days cover to cover. I was so excited and inspired by this book that I couldn't put it down. I kept thinking how I could get started RIGHT NOW! I was checking my voicemail and got a frantic message from my cousin (a renter/wannabe homeowner). I decided to kill two birds with one stone, so I gave her a call and find out 1) why she was spooked and 2) let her know what I was up to (becoming a REI).
In the course of conversation she told me that she received a letter a week or so prior to my call, which told her that the home would be forclosed on that following saturday, (this past March 21st). She then told me she did some investigating and called the mortgage company to find out that the owner has been pocketing her rent checks and not paying the note. She called to find out what SHE should be doing since she would be out of a home in 3 days. Needless to say the mortgage company let her know that something was worked out between the owner and them (the lender) to keep the home from foreclosing. The owner does not know my cousin is aware of all that has been going on since the notice was addressed to "Dear occupant". She found out the bank would have auctioned the home starting at $120k, where as the comps in that particular area are around $250k+. She asked for my help with a down payment, and for some advise.
I of course, was very excited and proud to say, "that I am now a real estate investor, and I'd be happy to check my resources and let her know my finding". She was telling me of her credit/loan issue and I immediately thought lease option. After saying that I have had soo many questions going through my head, I think im starting to over analyze more than I need to.
Well DG FAM, could this be a blessing in disguise and something I should pursuit? Since the owner has no idea that we are aware of the situation, how should I contact him to negotiate a purchase? Is there a way to go directly through the bank? Or should I just move on and let her know I can find her something else? I would appreciate the help. Thank you in advance. 
VEE
P.S. I KNOW ITS LONG. SORRY, I WAS SO EXCITED I JUST HAD TO PUT ALL MY THOUGHTS DOWN AT ONCE .
Very excited FOR you!
If the bank would have auctioned off the house at $120K, that would indicate how much the judgement amount on the owner would have been (I'm pretty sure). If your cousin thinks that the owner might still be in financial trouble, she should call him (I'm assuming it's her landlord) and say "I got a notice saying the house is going to be forsclosed on. I was really scared! Will I have to move out??" And when he says, "No, it's all taken care of." Now, DEPENDING on his tone of voice (confident or uncertain in his answer) she could ask if it's possible he would want to sell the place, that she's got a cousin who is looking for a place to buy right now and this would be perfect because he could sell if he wants and she could stay and rent from her cousin (you) until you decide if you want to move there or not. THEN, if he IS interested, he'll ask what you had in mind. She could then connect him with you (or she could be the go-between at first) and you could tell him there are a number of ways to go about this. You could take over his payments until such a time as you would buy outright. You could do a lease/option or assign the property. The important thing is to feel him out each step of the way, keeping in mind that you hold the key to help him IF he sees that he has a problem. Not to PUSH a solution on him, but give options for him to consider. Confidently.
Oh, and if you plan to assign the deal, start running a Craigslist ad NOW for a house with that description and price you want to get to see what response you get and possibly start your buyers list.
Good luck!!! And way to take action!!!! Keep us posted on this!!
God bless,
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thanks for your advise, it's much appreciated. This will be my second real estate transaction (I currently own my own home), but my first investment purchase so im a little fuzzy on the details. Sorry, if I have so many questions just wanna make sure I understand.
Can you please be more specific when you say "take over the payments until a time when I can buy outright"? Does this mean I would continue to pay the mortgage while it is under his name, until I am ready to refinance to purchase the home at a later time? It seems as though this will be a short sale, where I am dealing directly with the bank. Then do a lease option with my cousin for a year or so. The sale price of the home will be $124k, and I will be talking with the mortgage rep for the property to confirm if I will be able to take over the payments. Is that right? Do I have to use their title company or can I use my own? My other concern is should I develop an LLC or an S-Corp to house this property under since I own my home, and a car? It seems this may take place sooner than I expected. Wow is this going fast! Thanks again...
VEE
It would only be a short sale if the bank has to sell it for LESS than what he owes. If your comps are right ($250K) and the bank would have auctioned for $120K, this indicates that the owner owes only half of what the house is actually worth, therefore it would NOT be a short sale and you may be in the position to take the property subject-to his existing mortgage. Or you can just ask him if he wants to do a lease with option to buy after a certain amount of time (lease/option). You would just be dealing with the owner, not the bank. This would give you or your cousin time to line up financing or another buyer for you to make a profit. Make sure you are sure about your comps before you go any further, though. That means getting from a realtor a list of similar properties tha have SOLD within the last 30-60 days. When you're sure of your numbers then you will know how much to offer to make a great deal out of this transaction.
You can form an LLC or you can just do this one in your name with and/or assignees included in case you choose to assign it.
Hope that helps. Maybe others can hop in with more advice, as well.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Thanks, I will definately get on that. I love that you are a real person I can talk to.
VEE
Well, I tried pursuing my first deal which turned out to be a bust. It's ok though, at least I put myself out there and tried to make it work. It seems the situation went much MUCH deeper, with sooooo many people involved and no end in site. It just seemed too time consuming, and not worth the trouble. So I am on to the next one. I am very excited, and I love coming onto this site where I get excited and inspired. Stay tuned for more information on my next project.
VEE
Hi Vee,
The important thing is you made the offer! Congratulate yourself for this! You learn and then move on to the next offer with awareness. Much success to you.............Lubertha
"GOD IS STILL IN CHARGE, HE IS THE AIR WE BREATHE"
That's right, on to the next one.
Think of what you learned, no-one can take those little nuggets away from you now.