OfflineSo here's the skinny.. I have a friend that is four months behind on payments, he's considering a BK, has a good job, but just upside down roughly a $100k. mortgage $285, FMV $180, needs some fence, landscape, kit-counter top wrk, permits or removal for slap poured in back yard. There's sentimental value in the property to him and would like one day to own it again. I'm willing to purchase the house for him and lease and/or rent it out to him or have a local investor to partner on the deal, but I just don't know the exact way to attack it???=/.. I see everyone's success and I'm sooo moved to do the same and I don't have the credit nor funds. I went to "coastalfunding.com" for the POF letter, which is cool..I can use that, but do I use that for my offer to the bank or what exactly??? I just wanna put all parties involved in a "win-win" situation, but through my readings many times, it for some reason or another is not clicking!! And I don't wanna drawl any (-) to the opportunity. With the money the home owner could save per month renting or leasing from me, I can show him how to purchase a LLC and start building two entities and work w/ me on this short window of opportunity. Based on his circumstances, he's putting me in the drivers seat. It would be much appreciated to get assistance. Thank you and hope to hear from anyone.=)
I don't think I would touch this, friend or not. You dont want to put yourself in a bad position just to help out a friend nor should he want to put you in a bad position. The only way I see this happening is doing a SS on it but having an end buyer lined up. He wouldnt get the property back but it would save him from forclosure. He would take a 2yr credit hit but thats better than 7-10yrs after forclosure.
He can start over and you would have helped him out. JMO
BEST OF LUCK
Richie
You wanting to help your friend will put you in a position where anything less than success will result in bad feelings
Might be something that cannot be reversed
If you really feel compelled to help him, make sure it is with someone on here who knows how to do SS's or someone that can be recommended.
Seems like a great deal or your options are good ones, but this may not end well and if it doesn't it might cause damage that can't be reversed
When you went to coastals site, you were approaching a transactional funder, and while that is not a bad thing in itself, the problem you have is that for this situation, that won't work.
The reason it won't work is that you are going to have to have a qualified end buyer in place, who is willing to buy through the double closing system. Almost all buyers would be willing to do that.
The problem is that you don't have a end buyer who is qualified lined up and if you were to find one, they would have to be a buyer who is an investor and not someone who is looking to live in the property as what is known as a retail buyer.
How this could work would be to locate a general contractor who buys homes to remodel and/or keep his crews busy. You could explain that you are looking to lease-purchase the property to your friend and explain their situation.
The good job helps alot but in itself may not be enough of a motivating factor for them to keep your friend in the property.
Personally I would not do this deal, but that is just me.
awesome=)..im so glad for the clarification and experience that i feel through the words.. you guys are great!! maybe I should express all situations i'm currently considering.
property #1 original listed price $300K but now $210, considering dropping under $200k's spoke and met w/ agent. out of state owner, on market for six months, zero offers, paid off two mobile properties on 1.1 acre lot, front property rented out but not permitted, back property deemed not livable because windows flooring, plumbing ect., needs major land scape and drive way, fence wrk, rehab wrk $20k+. I would like lock this one up using hard money, do the work myself and/or outsource, resale shortly, but again its that whole "contract" thing and the timing in which I submit things and how??? When speaking w/ the all these agents, they always seem to be rude and want to do things w/ all their resources and think what I'm trying to achieve here is fraud=/.. I need to get over this hurdle and make things happen asap. Someone please slap me around and straighten me out!! I"m good for the discipline. And again..=)your time is much appreciated!! Have beautiful evening everyone. I know I will figure this somehow.
I would suggest since you are friends, to introduce him to some buyers, see what they have to offer, what the process is, and you not take any money for it. As you sit in on the negotiations, your reward is seeing how experienced buyers operate.
His mortgage payment is only $285? Even if you payed the 4 months he is behind on and took it over and leased it to him then how would he be able to make payments to you? If he can't pay 285 a month then how can he pay you?
What I would do is if you wanted it, tell him you will buy it from him for what is owed on it. And in the future if he wants to buy it back you can sell it back to him if he gets financing again.
Jeremy
This train, Dreams will not be thwarted
This train, Faith will be rewarded
Big wheel roll through fields where sunlight streams
Meet me in the Land Of Hope And Dreams
Bruce Springsteen
I don't like traditional real estate agents for the simple fact that they generally do not sell investment properties and if they do, they really do not understand what they are doing, not all but most are like this.
The one beautiful thing about dealing with real estate agents is that there is a such thing as a buyers agent.
The difference is that a agent who represents a seller is obligated to act in the best interest of the seller.
A Buyers Agent is exactly the opposite. They act in the best interest of a buyer. They look at what you are trying to do and find a way to make it work. They get paid out of the transaction, meaning that the agents commission in the deal is split between the buyers agent and the sellers agent.
This would work for you on these deals or any deals. On these deals, it could work for you if the sellers agent has not shown you the property.
When I call a agent who works for the seller, I never give them my real name. This way they cannot reference me to a transaction.
You could also completely go around the agent by doing a title search at the courthouse. Many courthouses are online these days. You simply look up the property address and locate the name of the property owner.
You then go to the tax records and locate the sellers address where tax bills are mailed to. You send them a certified letter that says:
Dear ____________,
My name is and I am a real estate investor in the town of _________________. I understand that you currently are the owner of record for the property at __________________________.
I was informed by the real estate agent who represents you in the sale transaction that you reside out of state, that there have been no offers to date.
I would like to make an offer on the property that I feel is very fair and could work for both of us.
My telephone number is _____________________. Please call me to discuss.
Regards,
This letter will get their attention and it may or may not work. It gives you a good shot at getting a reply from the seller or their agent.
If the agent calls you and you simply do not wish to talk to them, you could always give them your own agents phone number and direct them to discuss the deal with the agent.
Good luck to you.
I would go back and read Dean's book. Decide what you want to pursue, just starting out I would suggest assignments or maybe do what Greg Murphy does and go for sandwich leases. I think you have some good advise on here, unfortunately there probably isn't much you can do for your friend other than to find a buyer.
... Verses: 35 "but those who hope in the Lord will renew their strength. They will soar on wings like eagles; They will run and not grow weary, They will walk and not be faint." Isaiah 40:31 ...
Please remember to stay focused & take smaller steps. I agree, if you have not done any deals yet & have no money/credit...you must bird-dog, assign contracts or do a sandwich lease. Keep it simple, don't try to take on complicated deals that will just end up frustrating you, making you loose interest, & then giving up. It's better to "Get Fat on Skinny Deals" & make $1000 to $1500 per deal than have a deal go sour & make nothing. If you find a great deal it is easy to find a cash investor to pass it on to. Just hang in there !
Hey, completely understand about the wanting to help a friend out that is looking at foreclosure. Had same thing happen to me a few months back. Great guy I have known for 13 yrs. called me one night after we had spoken earlier in the day and I had told him, I started a biz....and I was a Real Estate Investor and gave hime the few minutes layout of what I'm looking to do. Long story short, he was hitting on 4-5 months behind on him mortgage. He desperately wanted to stay in his home and asked me for any suggestions. Well I told him I would get back with him the next day. So first thing next morning I called the Success Academy layed it all out and then listened. Bottom line they said it is your business, I can do as I want BUT be aware of these things: if I paid the back payments to cure the loan, I could take over payments, he signing a quit claim deed (believe is correct doc they said) and I inturn lease to him. I could possibly shortsale the property, etc. But the major kicker was that if he ever quit paying me through whatever avenue I chose to keep him in the property and if it ever went to court. GET THIS.....that HE would have more rights to the property than I would. Even though he was one of my besties.....I chose to be completely transparent with him....and told him just that. Said I love ya man.....but this isn't personal it's business. He owed $20k more than FMV, it was a nice home but in the country (limited marketability) and I didn't have a buyer looking for that type of property. So may look to short sale his property, assign it then you could possible split your fee with him. As a kickback 4 leading you to a deal that closed! lol
on a different note: other property you were looking at rehabing yourself. All I can say...is DO your research, have your exit plans and trust yourself and your gut! Google: Hardmoney Lenders + "Your city and state) and search it. Some HM will go as long as 36 months. You pay for it, but take it into account in your offer. Just remember if you DO get hardmoney to fund your deal.....you can be safe to say You DO have a good deal! They do their research too! lol!
Best of luck! And GOOD FOR YOUR for taking action!!! Whether it works or not you have increased your knowledge!
Keep us posted,
Jen
O.k. sorry so long.....but hope this helps.
Ok, I would tell your friend to speak to his lender. ask them for a remod loan that would put the deliquent payments on the back end of the loan.If they agree and If he can afford the payments, maybe he should put it on automatic with-drawal from his bank so it comes out weekly from his check and he cant spend it and run himself short.
other wise like Chris said, your better off starting out with wholesaling to get your feet wet.
best of luck
Richie.
as if im all over the place. I want to submit offers, but apparently i have it all mixed up that im all confused. the only thing i want to do for right now is to assign deals or sandwich leases, but to be honest right when i think i got it something or someone reminds me i'm flying by the seat of my pants=/.. other than an agent and a RE attorney, I have all the resources i need to accomplish this, but again i now feel like my plan of attack is wrong.. i'll just keep digging..somethings gotta give.. thank you.
it is very much appreciated=)..
@Jen or anybody for that matter.. when using hard money how would i formulate the contract and offer to the home owner because the listing agent will not let me on the lot again w/out an offer submitted and I don't know how to do that!!=/ she wants proof of funds letter or a pre approval letter which i don't have.. the place is in a great location it just needs work all the way around and i can do that if funded by hard money.. and does hard money cover all closing cost along w/ any down payments or how does that work???
I just got approved for a hard money loan and the local company that I will be using funds 70% of ARV (after repair value), plus closing costs, plus the appraisal costs. You have to come up with down payment unless you have other property you can borrow against. This guy is a conventional hard money lender and applying for the loan was almost as much paperwork as a mortgage. I had to give him my complete financial information. Then when I get a house under contract, I have to write up a complete detailed estimate of repair costs and he has to approve the deal. This is my first time using a hard money lender.
I understand there are other hard money lenders out there that only look at the deal, not your credit and income, I just haven't found them yet. You will need to present the deal on paper to them so it makes sense. What you're getting it for, estimated repair cost, and get recent comps to back up your after repair value.
Once I got approved, I got a statements from the lender which is a pre approval, and you can make offers with that. You still might need earnest money to get it under contract.