HELP!!! Any Ideas??

you do a lease option when the house is upside down? There is no equity in the home. No one is going to buy a home with no equity because what ever the purchase the house for will not payoff the loan balance. Your only option is to short sale the home. You will need to find out if the bankruptcy has already started because if it has, most likely the lender will not entertain the idea of a short sale. I have a short sale where the homeowner filed for bankruptcy in the middle of negotiations and it has screwed everything up. We are still waiting to hear if the bank is going to continue with the short sale even though the attorney wrote a letter giving permission. Good luck.

ask them what to do, thats what you are paying them for.......

walt

Yeah I am in contact with my mentor as well thank you for that Walt, just wanted to see what you all thought as well. The reason for the Lease Option is that my friend owes 210000 on his home and it is worth 205000. It is a 4 bed 3 bath and his payment is 1400 but I can get it rented out for about 1700-1900 so I figured we could make some money there require a 5k down payment and then sell in two years for 220000 and make some at the end. The house was worth 240000 about a year and a half ago. I was also thinking about getting my friend into another lease option because of the bankruptcy. I have a house I just contracted up for 130000 that is worth 180000 ARV of about $10k. Was thinking I could make a double deal out of it which would also be my first deal...

You need to start working on your own future, why wood you want to take on someone Else's problem.

If they are in bankruptcy, then there are other factors in play. Some times the best help you can give someone is the painful truth. They should not keep chasing a bad dept. If they are in bankruptcy they got a lot of time. So you should tell them to start putting that $1400. a month away so they have a down payment for the new house you are going to find and lockup and lease back to them. Good Luck

Jim Kendrick

They are not going into Bankruptcy... just to clarify. They want to drop their payments and are looking to get out of their current home.

I agree with James. Don't take on their problem right now. If they are into the bk as bad as it seems, help them to get back their feet after the smoke clears. You are new to the business pilgrim, so you have some studying to do. Right? Let see what you can do with a couple months of studying and reading under your belt...Jan

I see what you are trying to do and I think it could work. There are other people out there with bad credit and some cash that you could get into your friends home. He can save up some money to get into a lease/option that you set him up in. People everywhere are all in the same boat. Everybody's credit is in the crapper. People are getting creative! It's the only way to get around the banks right now. Read Greg Murphy's deals then go for it.

and rents for $1700-1900? Does the mortgage payment include taxes and insurance? Does the loan have PMI? A sandwich lease would work nicely for you so long as the market actually does go up in a few years. So long as the mortgage payment includes all the fees and if there are HOA dues they are not very much, and you've taken into consideration ALL costs associated with the monthly expenses, it sounds like a good idea to L/O it from your friend like Ranger16 does. VERY long term (we're talking 10-20 years) for the principal amount owed on the loan. Allow your option contract to specifically say it will be purchased for the amount of principal due on the loan at the time the option is executed.

Before you do that,do some test marketing. Put an ad on CL for it to see if there is any interest in the L/O for $1950 (start high, or put multiple ads with different prices), just general with the criteria of the house w/o an address. See if you get any response. Or, better yet, put a generic ad out that Greg Murphy Does 'Stop Wasting Money on Rent' etc to get a list of L/O buyers in the area. Also put out bandit signs 'Own a home with bad credit'. See how much money people that respond can afford monthly when you interview them. Base your decision on the response and the interviews with with prospective tenant buyers to see if the market's there.

Way to think outside the box! I guess I like the more unconventional ideas; I see a potential to make money here monthly and in the long term.

just rent out the house for a couple of years and move into a cheaper place; he could save the xtra money from the rental and then get into another lease-to-own that you could find for him in the future?
There is a lot to learn in the Academy...

I don't think alot of people know about or even think it is an option to rent or L/O their own home out! Zion, I see you on here alot and think you are very knowledgable, I am actually stoked you even commented on this lol! I actually did think of doing ads on CL but love the bandit sign idea and wording. I did think of all the HOA's and other fees, I guess he refied or something to get his payment lower but the market still kept going down and they are just having a tough time with the payments... Trying to be creative...

I believe that you are on the right path. You are thinking about how to help others and to create win/win situations. Your mind set seems correct now figure out which approach to take and take action. I sure your friend apprecaites your time and efforts. Also, you should be able to add to your buyers list by marketing (Bandit signs, CL etc.)the property.

Best Wishes,

Keep up the good work you are appreciated!

Matt,

I just got out of a similar situation with a lease-to-own on my personal home using Dean's form "Agreement to Lease with Option to Purchase". Check out Greg Murphy's methods in Dean's book. See my recent forum post regarding what I did, if it helps. You will find great help on the DG site!

Good luck to you!
Ed