I got a call from a man who has been paying the 1st lender but not paying the 2nd. Now the 2nd has filed lis pendens. The home is a rental and the rent just covers the mortgage but the owner has been using the part of the rent for other bills There is little to no equity in the home. The owner wants to keep the house.
What are this persons/ my best options? I would guess the only option is to pay the 2nd their money. Should I enter into an agreement whereby I purchase the property, make up the arears and option to sell the home back to him in a year or two? Thanks
Tell this guy to call you when he is ready to sell the property.
He’s been collecting the rent but not paying the mortgage and you’re considering leasing it back to him? You have much more faith in the human population than I do, friend.
Verify your state laws concerning foreclosures, but if the 2nd forecloses they must either assume the 1st loan, buy the 1st loan, or payoff the 1st loan at the foreclosure.
My suggestion (once you have an idea of how your state’s foreclosure process goes), go to the 2nd, offer to buy them out at 10-30% of the balance, then finish the foreclosure process yourself. You could actually end up with a rental that cashflows.