I recently heard a soundbite regarding an 82% Rule.
I believe it applies to California, New York and Illinois.
If I make more than 18% profit when buying a home in preforeclosure, I have to give the surplus profit to the seller?
Can anyone explain what this is about, and if it’s true? This was a legal watchdog type person discussing real estate, but I did not have an opportunity to ask the question.
If it’s true, how are people in the above referrenced states doing this business successfully?
for the most part if the property is in pre-foreclosure and is owner occupied you must offer 82% of the current market value as established by a 3rd party appraiser
isn’t putting limits on investments like this contrary to the idea behind capitalism? Perhaps I’m miss understanding this, but it sounds like this limits RE investors to a max profit of 18%.
This is another stupid bit of legislation that is designed to make lawyers rich but sold to the public as “consumer protection”
Depending on how the law is written, the net effect can be to drive investors away from foreclosures thus ENSURING that homeowners in distress will go to foreclosure rather than sell a property to an investor.
Another negative side effect is that the banks will have a glut of vacant REO property driving down property values and attracting crime.
I sure wish the government would get out of the way and let the market clean up the mess others have made.
Where could I find more information on this issue? Is this a HUD issue? A lender issue? An IRS issue? and is this nationwide or simply a state issue for the above referrenced states?
Anybody have any insights?
Interesting. I have never heard of this. I would be very interested if anyone can provide any documentation.
To mitigate your risk of having to pay back this money, get one of the realtors on your team and have them list the property on the MLS or which ever system your realtor uses. After you have placed your offer with the seller then have your rrealtor change the status to under contract. Close your deal and everyone should be fine. You have only 1 realtor fee to pay.
Do you have some insight as to the issue at hand here? Without knowing what the underlying issue here is, I don’t fully understand what your suggestion accomplishes. Can you provide some further information so I can make the most of your suggestion.
Thanks!