OfflineHey im just starting out and have not made any purchases yet. Im looking at making my first buy on a foreclosure on a home that belongs to a couple I know. The home is in pre-foreclosure not because the couple can't make payments but because the home was tied to a business the homeowners owned that sunk. Is there anyway I can obtain the property and sell it back to them? Or would I handle it no different than any other foreclosure and could I potentially rent it out to them and sell the property back to them on a later date? Any help is greatly appreiciated, Thanks.
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Welcome to the program.
If the property is a couple of months behind in the payment or a couple of months from Auction, you could try a short sale. Meaning the property owner would have to sign off on the property and see no profit. The final decision on the offer would come from the lender. Short Sales are being done now because the mortgage is higher than what the property is worth. Doing a Short Sale is asking the lender to take less than what is owed. To present a SS, you will need to provide documentation, a sob story from owners, comps, repair costs, pictures if you have them. Once the lender agrees, you could buy the property and lease option it back to your friends.
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that route yet, pjacobs, why are you advising a "SHORT SALE" when he(pcb07) hasen't even done ANY "due diligence" yet? As of right now, we have no adea: 1) what the properties worth, 2) how much is owed on the property, sorry but theirs no way you should possibly advise a "short sale" already.
Now, pcb07, i think the first thing you should do is: 1) Ask the homeowner what is owed on the property(ALL mortgages) 2) then as i said, you'll then need to figure out what the properties worth to see what options you have. If they have NO EQUITY, then YES a "short sale" would be your answer, but if they have a little equity or more, well theirs a number of ways to aquire that property, and the first that i would look at would be taking the property "SUBJECT TO" the existing financing.
YOUR HERO, SULLY
If I read pcb07's question correctly, the real sticker is, "The home is in pre-foreclosure not because the couple can't make payments but because the home was tied to a business the homeowners owned that sunk."
Apparently the amount owed for the business failure may be the main question, and the primary lender on the home may not be the person or entity who has the home as collateral for the business obligation. It still comes down to negotiating with whoever is in the driver's seat, but how to do that may be very different from a regular foreclosure. That person or entity may be an investor, too, rather than a bank which is not in the business of owning property and wants to get out from under. If so, they might be willing to handle it like, and compete with, a Dean student.
cactusbob