I am a mortgage broker in NJ and haven’t really explored RE investing as of yet, but I’ve stumbled upon a deal that could be profitable. The homeowner just negotiated a short sale with his bank for 700K, the home is worth 1.25 million, and sherrif sale is about 2 weeks away. I have built rapport with the guy and have offered to help him repair his credit over the next 6-12 months to buy back the lease.
questions
if an investor buys the home for 700-750K, how much will/should he charge for rent per month?
Is there any pre-set range to the buyback price?
how long does the renter (current H/O) have to fix the credit and buy the house back?
is this an appealing deal for a REI?
do I stand to earn a birddog for the referral?
any other input is appreciated and welcomed!
sorry if I seem naive, but I just stumbled upon this
I don’t have enough experience with this particular type of deal to answer your specific questions, but I would like to mention something just in case. With the rash of foreclosure and “mortgage assistance” fraud going on in the past 2-3 years, many states have begun enacting laws that regulate the very deal you’re talking about (i.e. saving a homeowner from foreclosure and then renting their property back to them).
I don’t know about New Jersey specifically, but please make sure to look into that first. I had a client last year (I’m a real estate lawyer) that was simply trying to help out a person in need, and in turn got sued by the person for his generosity because he failed to comply with the state’s new foreclosure laws. This concern only applies if you are planning to lease the property back to the former owner. If not, then no need to worry.