Was I Robbed By A Bottom Feeder?
8 Years ago a man was advertising "We Buy Homes" in the local paper. Well, we were hurting, financially, and were about 2 months behind going on 3 in our mortgage. He came over, we signed some papers, paid him 20 dollars cash, in which he made COPY OF , and a notary was with him, and he took over the property, and we stayed in it, till HE sold it......
My question is , is this practice used often, and if so, whats it really called? I dont want to do it, and it was the very last day before foreclosure that our house sold! It took 4 months to sell! I was mad, but happy at the same time!
Wayne
Wayne,
I am sorry you had a bad situation with an investor. I agree that he probably took the property subject to. That is a common, and good way to help people out of a bad situation. The problem is not how he handled the real estate, but how he handled you.
First, he should not have let you stay in the house. That put him in a very bad position, and you could have sued him for usury, and probably won.
Second, he should have set your expectations so you would not have been surprised.
Had he told you he would help you out of your situation, and get you started on starting over, but that you still would not be able to stay in the house, wouldn't you still have jumped at the opportunity?
It seems that you want to invest in real estate. That is great! But don't blame the acquisition method. It is a good technique, and one that you can use to help many people who need a fresh start. Don't blame the investor. With the little information you shared with us, it sounds like he did all the right things, except for setting your expectations.
THanks for the feedback.
I was just a bit "leary" of the practice, but on the last day, it got me out of full foreclosure.... What was weird was he said as we sat at our kitchen table "Now all we need is the notary" and just then, the front door bell rang...... it was strange..
ANyway, yes, I am looking for the opportunity to invest, but have NO IDEA where to start ---- I am reading the forums, and trying to put it all together
Wayne
Wayne,
The best place to start is generally bird-dogging and wholeslaing. This gives you an opportunity to network with other investors, and to get paid to learn. I would also recommend going to your local real estate investors club.
Your terminology suggests you are wary of "bottom feeders." In defense of bottom feeders everywhere, you find the best deals when you feed low on the food chain, right there near the bottom. You wait for the right deal, and make your move. Many slip through your fingers, but you remain persistent and relish the payoffs.
True bottom feeders may buy at 70% of FMV, but we're looking for 10 or 20%. Because we're sniffing, always sniffing, we occasionally find such deals. I know I have, and I've been at it for barely a year (hint: poorly advertised tax sales in counties that aren't online yet). Of course, using leverage and low/no down, you can do even better. Sniffing, always sniffing...
Though you have some questions now about exactly what happened, it was indeed a bottom feeder who helped you years ago. As you read these fora and start sniffing around for deals yourself, you will be well-served to cultivate your own bottom-feeding instincts. Good luck!
I guess I'm having a hard time figuring out how you were "robbed" here. You were in foreclosure, had no way of making up the back payments. Guy came in, made up the back payments, let you stay there for some period of time for free, sold the house and kept the foreclosure from becoming a permanent part of your credit report.
You were mad because he made some money? Or because it took 4 months to close? Or because you got to live there for free? Again, I don't exactly see where the "robbed" part came in.
I was mad because I signed a contract that sold my home for 20 dollars, they never made back payments because I almost went into foreclosure, if they made back payments,I think that would have brought me up to date on my mortgage, but they didnt, so of course I get to stay there. All they did was give me 20 dollars, and match me with people who had the money , but not the credit to get into a home.....
2 weeks or so after I did this, a realtor told me that if I went through them, they would have sold it, quicker than 4 months and I would have made about 5 or 6000 dollars from the sale, even with the back payments.
Does that help?
Wayne
sub2 is common. it seems the investor got what you needed accomplished, accomplished.......km
Wayne,
If you end up doing sub2 deals to help others, just remember you do need to fulfill your promise of making the payments.
And that agent who said he could have sold you home much quicker? Phooey! There are no guarantees like that and anyone who says so is likely blowing smoke. No one can predict the future.
One way to motivate an agent is to NEVER give them a six month agreement. Give them three and if they haven't sold it you're not stuck seemingly forever. Give them 8% commission if the house sells in the first 30 days after being listed, 7% if sold between day 31 and 60, and 6% if sold during the final month of the contract. Ensure they actively advertise it, not just put it in the MLS. They should be doing a lot of advertising. Get in on the "parade" of newly-listed homes so ALL the other agents in town go and see it and know what they are dealing with. Actively participate in producing sales brochures (yes, you!) to ensure the home is properly described.
Good luck,
Bob
And that agent who said he could have sold you home much quicker? Phooey! There are no guarantees like that and anyone who says so is likely blowing smoke. No one can predict the future.
One way to motivate an agent is to NEVER give them a six month agreement. Give them three and if they haven't sold it you're not stuck seemingly forever. Give them 8% commission if the house sells in the first 30 days after being listed, 7% if sold between day 31 and 60, and 6% if sold during the final month of the contract. Ensure they actively advertise it, not just put it in the MLS. They should be doing a lot of advertising. Get in on the "parade" of newly-listed homes so ALL the other agents in town go and see it and know what they are dealing with. Actively participate in producing sales brochures (yes, you!) to ensure the home is properly described.
Good luck,
Bob