New Investor here in need of good advice please. Scenario...

Hello all, my name is Lenny and I’m pleased to be a member here. I have a lady who just moved out of her house 1 month ago after filing bankruptcy because she was on a ARM and the payments just kept getting higher and higher until she couldn’t afford the house anymore. She purchased the house in 2007 at 173k, and the house is only worth about 90-100k in today’s market. She has already moved out but the bank has not yet foreclosed and the house wasn’t destroyed.

She desperately wants the house back! The problem is I don’t know what method to use to take control of the house. Do I try to buy the note? Do I try a short sale? Do I get her to quit deed the house to me? I’m very sorry for not knowing and being a newbie after all the tons of stuff I have read, but reading is easy but when it’s time to act I actually feel frozen. Thank you in advance on any insight you can give me in helping me try to solve this problem.

One other thing, the mortgage company’s attorney sent her a certified letter saying it was gonna be sold on courthouse steps on oct. 7th, so she moved out on oct. 1st. I had a realtor friend look up the address in tax records and the house is still showing in her name.

I understand there is no equity in the house so i guess what I’m trying to do is purchase the house or the note at a very discounted rate and then do a lease option the the old owner. The value I see in the property is that it has a built in buyer. I know this person so I know how valuable the property is to them. Please any advice at all would be greatly appreciated be it negative or positive.

if they said it will be auctioned off on oct 7 then they probably have taken possession of it. and where were you going to get the money to buy the house?(whos going to lend you money on it if theres no equity and its probably way to late to try a short sale) and what would be in it for you if you did so?(how would you make money in the deal?)

I’m not really sure yet about the funding. I hope to make profit buy purchasing the house for under market value since the note went into default and making a profit by doing a lease option with the homeowner that went into default. They owed 173k so I’m guess they would buy it back at 100k (current market value) after a reasonable down payment and 2 years rent payment on time. Am I looking at this all wrong?

yes cause you have to figure out how you are going to purchase the house first to even offer the bank a low enough offer so that you can have equity in the deal to make a profit