home owner ready to walk away

Foreclosures, Short Sales, Tax Foreclosures
1

These folks are 3 months behind, already applying to apartment complexes…they are done. They said “we don’t want anything to do with it” they owe 190k one mortgage. The market vale is$100k

Question is, my first deal, better to bird dog it off and let someone show me through the process?

They willing to sign poa or just sign the deed over to me.

2

If they really owe nearly double what it’s worth, what are you going to be able to do with it? Sounds like it would be hard to create an upside on this for you.

3

Here is how I do it as a licensed broker:

  1. take the listing with high commissions. For this price point, maybe around 20-30k
  2. Try to find a buyer willing to pay as close to 100k as possible.
  3. Have the buyer re-write the offer to as low as possible with low comps and high contractor’s bids to get as the property from the bank via short sale as cheap as possible.
  4. Have the buyers pay the difference in commissions from what the bank pays and what I have from the sellers in the listing agreement.

As a private individual:

  1. create a POA with the short sale as a contingency
  2. Negotiate a short sale with the lender as low as possible. You’ll most likely will need a broker on this.
  3. Find a retail buyer while negotiating the short sale.
  4. Flip the property

Whatever investment tactic you use, you will need to do a short sale or a principal reduction via a loan modification.

4

Other than face a foreclosure, the only other option that makes since here is a short sale. No bank will lend to a buyer for a home priced at double its value. And, if they deed it over to you, you’d have to catch up on the mortgage payments to avoid foreclosure.

If you plan to live in the home, and it’s a house you actually can fall in love with, it may be a good deal for you. But, as an investment, it’s a bad one. You’d be better off making a short sale offer so that you can get it at a price closer to that $100K.