Help! In foreclosure but has equity. Not much time.

First of all this house is in foreclosure in FL and is going to sale This Dec 7th so not much time. Loan is 101k not sure about the back payments yet. Prob about 2 years behind. Also an IRS tax lien most likely attached to the property about 28k but I’m not worried about that right now. ARV is 170k-240k. I know thats very broad. Sorry. Needs minor repairs. Has been completely rehabbed in the last 5-10 years. I know there is a deal here I just have to figure out how to structure it. Can I stop the sale if I bring the payments current or does the loan need to be paid in full now?

What sort of contract do you have with the owner…otherwise any $$$ you put into this could be down the tube.

I do not see much of a deal myself.

101,000 Existing TD
28,000 IRS Lien
20,000 two years back payments, and fees,
10,000 Fix, paint, etc

159,000 Invested

Now add carry costs, time, effort, energy…is all this worth 11,000 or maybe less in a dead FL mkt?

No contract or money invested yet. Just got the lead today. I’m thinking I can get the IRS tax lien removed.

If you count the costs and really want to purchase the property, there are a couple of options:

Option #1: Prepare a purchase agreement, contact the owner and ask him to take to the bank for a short sale. It is possible that the time period for a short sale is over - but it cannot hurt to pursue it. They may stall the sale to see if they have a deal here.

Option #2: If the property is going to auction then you need to hurry and get your money. Purchasing a property on auction will require that you pay in full within 24 hours.

Option #3: If you miss the auction then your other option is to wait until the property is listed with a real estate agent and then take it from there.

I just found out that the law here in FL is that if the owner has gotten a letter from an attorney about their house in foreclosure, then I can’t buy it sub2. If its rented that I can still buy it sub 2. Here’s what I’m thinking-

Get a purchase and sales and authorization to release loan info, and talk with the bank and see if I can make up half of the payments now and add the rest on to the end of the mortgage.

Get a title search to see whats attached to the property. Contact the IRS telling them there isn’t much equity in the property and will they release the lien. If the numbers still work and everything checks out then I can close subject too, make up half the payments and keep 30k-60k in equity, or so…

What ya think?

If you buy it subject-to then you take title subject to ALL LIENS and encumberances.

Never heard of a state law that pre-empted Fed Law and Garn St Germain says the Due on Sale Clause is enforceable for voluntary or involuntary transfers.

I thnik you are dreaming if you think the IRS is going to release their lien just because you want them to.

They on the other hand will say, “Now we have a NEW BUYER with $$$ who has taken over and we can collect on our lien.”

The IRS lien will not go away for tax sale or foreclosure…they have an automatic 120 right of redemption…regardless of thier position in the chain of title.

IMO your best bet is wait for the tax sale as I suggested in an earlier post. It will clear lots of problems.

Here’s the latest update. The bank wants 101k which includes all back payments. Owner wants the the 28k IRS lien paid off as well. It would have to be a CASH sale for 129k plus closing cost. Needs no repairs and is worth about 200k and in good area. I don’t have that cash so I’d like to wholesale it and make a few grand but I have less than 3 weeks to close. If it goes to tax sale it will sell for significantly more that 101k prob even more than 130k.

Suggest you google and read the FL Tax Sale statutes…at the tax sale it will go up for sale on a “BID DOWN” basis…which means the bidder will bid down the amount of interest…the taxes will not change.

No matter what happens…the IRS will have an automatic 120 right of redemption…and if there is sufficient equity they will exercise and place it on the IRS Guaranteed bidder requested list on their website.