Can a Lead Option be done on a PreForeclosure?

General Real Estate Investing
1

Can a Lead Option be done on a PreForeclosure?

Thanks

2

You mean a Lease option?

Yes, it can but it may not be profitable. If the property is in preforeclosure the owner is behind on his mortgage payments. If the owner does not have the cash to cure the default on his mortgage, you will have to. The question you have to answer is whether the amount you will bring to the deal to stop foreclosure will still make the deal profitable in a lease option deal.

You will probably need the same amount of cash to take the property over subject to and get the deed.

3

Hi!
Yes Lease options. I was just looking at some leads right before I typed that message, so sorry about that. Thanks for your help.

4

I would not rent until after the pre-foreclosure is reinstated. Out here in California if you rent to a tenant a house in pre foreclosure you are obligated to tell the tenant and because of our rent skimming laws you can not collect rent form the tenant since the lender will not accept a payment short of a reinstatement amount.

5

Thanks

6

A very simple answer is yes it can. You of course need to make sure that there is enough equity there to cover your expenses and make a profit. In this situation you would more than likely want to do a subject to deal though.