How do I put a home in forecloser under contract and what contract do I use?

Foreclosures, Short Sales, Tax Foreclosures
1

Just got a verbal agreement from homeowner $7k behing in his mortgage and is very close to losing his home. He is walking away from the deal with 5K in his pocket. He owes a total of $70k and the comps are at $135k.

I have a private money investor but they will not put up the money until the house is under contract. How do I get the house under contract to pay off defaulted mortgage plus get them to turn the house over to me once I fulfill the entire mortgage balance and the extra 5K for them.

There is about 60K in equity in this deal, is 5K unfair?

I think the 5K is agreeable since I am also paying the $7K in default bringing my cost to him at $12K. Can I position it this way? Reword it to say I am giving him $12K andpart of it is going to satisfy the default amount?

Please offer any suggestions.

2

So if he owes 70k and its worth 135k $94,500 is 70% if it appraises at 135k the HML should lend 94k on the property as it is 70% ARV (after repaired value) 70k to the bank to cover there loans on the property 7k to the seller and $18,000 minus closing costs to you!

If you have 7k to pay the back and 5k to pay him why not assume the loan? and get him to walk with his moving money!

Why would a HML loan money on a house that is not under contract! That is like me saing I like you and want to give you money!! if there is no contract there is no deal!

                                                                 Robb