I “may” have an opportunity that has come upon me. This person has a home that’s about 1 month from foreclosure. Here are “some” of the preliminary details, as my wife just called to tell me about it 4 hrs ago.
Asking price $125K (appx. that’s what’s owed)
1 month from foreclosure.
ARM is getting ready to reset shortly.
He’s in Ch. 13 BK now
Relative is renting ($1000/mo., will jump to $1400 after reset)
I want to try to get it for $85-90K
put 20% down (17-18K)
appx $400-450/mo, 30 yr fixed
continue to rent to same person for $1000
Does this scenerio sound realistic. I know there’s more info that’s needed, but would this be something to pursue with the ch 13 and all?
I’ll be reading everything I can about SS.
Thanks for the help in advance!
P.S. One VALUABLE life lesson I just learned 4 hrs ago.
One MUST be PREPARED when an opportunity comes, even if this is a deal or not, I hope to be better prepared next time a deal comes my way. I feel like a man stranded in the middle of the ocean trying to swim ashore. LOL
Write a contract to purchase the property just like you would any other deal. Get a written authorization from the borrower so that you can talk with the lender directly. (This can take 1-3 days to be entered into the system. Sometimes you can do a conference call with the lender and the borrower and the lender will take a verbal authorization over the phone. This way you can start talking with them right away.)
Tell the lender that you have a contract on the property and would like to pursue a short sale. They will tell you what you need to provide in terms of documetation (hardship letter, financials, photos, proposed HUD-1 or “net sheet,” comps, etc.).
Then you submit the package to the lender for approval. This process can take 4-6 weeks, so you need to get going now if an auction has been scheduled. Some lenders will stall the sale while they work on the package, some won’t.
You would also be advised to consider getting a deed to the property now so that in case your short sale is accepted someone else doesn’t come along and take your deal from you. Desperate sellers are usually talking to more than one buyer at a time.
If they are in ch13 don’t you have to go through the court appointed trustee? I thought once they entered bankruptcy that the courts took charge of everything!
Hmmm. Thanks guys for the replies. I will be talking to him Sunday or Monday. I kinda figured the CH 13 would be a sticking point. I also need to find out if the renter is stable and if he plan on staying. I’ll report back with more info.
you do not need to work via the trustee until you have a deal with the lender and your buyer.
Then you would approach the trustee and ask them to abandon the asset from the bankruptcy.
You will need to prove to the trustee there no equity.
NEVER tell the trustee you have a short sale approved or they will take your short sale, sell the property and use the profits to pay off creditors.
You in turn would get nada.
Some lender will not discuss the short sale when in bankruptcy but they are aloud to negotiate it… they are just not aloud to contact the debtor in regards to the debt.