I have run across a property in my that is due to be auctioned soon. The owner only owes about $20k, current value about $75-85K. In order to be allowed to bid, one needs to have certified funds for at least the minimum bid amount, and must pay for the sale within one hour of auction end.
I have no cash, but I have about $45k equity in my current home. How hard would it be to find someone who would lend the $25,000 against my current home, to be repaid the day of the auction? I was thinking maybe a HML would take all the paperwork in advance for a loan up to $50k on the purchase if the auction is won, to be Western Unioned upon close of the auction.
Is this creative enough financing, and does anyone think they might know if it’s possible?
Manny has a good idea. Try to deal with the owner and bring the loan current and get the deed. Make sure you do a title search before giving the owner any money for his equity.
When dealing with foreclosures I try to help the distressed homeowner.
if there is not equity, I do my my homework such a priliminary title search and then meet with the homeowner. Show more interest in solving their situation than the deal.
If they has tried to do everything possible to sell their house without success, then I’m the only one that can help. I even try to connect them with a broker to see if they can refi. If not, then
I get an authorization letter from them, prepare the purchase contract and have them sign the deed to me.
I call the bank and request a short sale package. I contact the Jr. liens and ussually get them for pennies on the $. most of the time I get the houses for .50 on the $. I bring the house current with payments and I offer to pay for them to move out, rent and apt and the moving truck.
If they have equity, don’t take advantage, do an equity sharing deal.
I love Real Estate!
Great points. I know this is a business, but I agree with you on doing anything you can to help the homeowner. We can all make a great living without taking advantage of people. And if you believe in carma, then it will only benifit you in th long run.
It’s all been tried. The owner is absentee, and have been unable to locate her. That was actually the original plan, and my first order of business. The deadline for bailout is in 2 days, and without being able to find the owner, the only other option is the auction.
