Some advice on this please!!!

I have been looking into pre-foreclosures for some time but have not ran across anything that looked too profitable. However I recently ran across a deal that I might be interested in working and keeping for myself. I would like to just give you guys the numbers and see what you think.

32.91 acres
Market Value $122,228
Principle still owed $52,730.82
Total amount in arrears $8,903.12
Total back taxes $1,478.96

Other than that I do not know anything else such as whether there is power, or water ran out there. Also I have not yet done a title search to see if there is any other outstanding balances attached to this property. My business partner is going to check the land out tomorrow and see what it looks like and get back with me.

It has always been a dream of mine to pick up some land and open a high end resort offering cabin rentals and horseback/backpack trips. There is nothing of this sort in the area at all which is really surprising. This land is located in the prefect area since it is right next to a National Forest with plently of trails and outdoor recreation opportunities.

What do you guys think my next step should be? Do you think I could maybe work a short sale directly with the bank? I am planning on contacting the owner as well by mail and see if he is interested in working something out before it goes to auction because I know the price is going to be driven fairly high.

Also how hard do you think it would be to find possible investors for a project like this? I want to build a lodge and start off with about 8 cabins for rent each having different themes. Of course everything done would be of the highest quality as that is the atmosphere I am trying to achieve. I have excellent credit and about $14,000 cash on hand plus my partner is my dad and he has over $50,000 cash on hand and even better credit. However I want to do this right so I know that I am going to most likely need outside investors.

Any suggestions would be greatly appreciated because I would like to get working on this as soon as possible since the auction is scheduled for the 29th of July at 10 a.m. That is why I want to get your oppinion on this and its potential. Thanks a lot in advance for the advice.

Howdy JK4138:

You probably will not have much luck with a short sale. The owner has equity at the value you stated and the loan balance plus arrears and past due taxes. You could approach the bank and buy the note and then proceed with the foreclosure. Sometimes this is difficult too at a discount.

Why mail the owner? Why not call tonight. You need to work fast to get these deals done quickly.

Get the deed from the seller for zero cash. If they want cash then still get the deed put in escrow with the title company and get the title search done before giving them money. After the title search is clear then you can pay the back mortgage payments and start making the payments to the bank in the name of the seller (sub2 sale). You and your dad should be able to get the financing to put together a resort deal without any other partners unless you are talking about millions.

Hope this gives you some ideas. LOL


So what is the first step I would need to do to begin a sub2 sale? I thought that it was not legal to take over someones payments on their behalf, unless you assume the actual loan. Is there a way around this? I was thinking about trying to get this guy to put the property into a land trust but don’t think that would be too beneficial to me if I want to buy the property eventually.

Anyway, I will try to get this guys number and give him a call on monday.

Anyone else have any advice?

Howdy Jk4138:

Call right now. Why wait till Monday. There are several ways to buy the place. All cash. Visa card, New loan. Sub2 would be easiest cheapest fastest. You can use all sorts of fancy trusts to try to hide the sale but it is still a sale. It is not illegal or immoral or unethical. You will not go to jail or hell. You will get a good deal. If you can hide the sale from the bank they will never know. If they find out you will have to possibly get a new loan to pay off the loan. It sounds like you want to do this anyway to be able to afford the development into a resort.

Just a few ideas I hope you some some more even better ones.


What type of contract would I need in order to do a sub2?

Howdy Jk4138:

If you can get the deed you will not need a contract. If not you can use the standard Board of Realtors contract for 1 to 4 family resale with a financing addendum that says that you agree to take over the payments but not assume the loan.