Program Im Trying
Im going to about 20 preforeclosures a day. I realze that some of these people need a second chance. I want to create a program that lets me purchase the house from them for a protion of there equity then let them rent and sale it back to them at the end of a year or 6 mos. If they are not able to by it then the house is mine and i have full rights..Any suggestions? The easiset way to do this is? Is anyone else doing this? Sould i ask for money at the table from the equity or get the deed and take ou a second mortgage whats the smoothest way?
I’ve done it, but it can be very risky. And in CA the laws are very strict on buying form someone in foreclosure. Here’s what our Civil Code says about it. You should definitely check your own state laws.
http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=13206426789+0+0+0&WAISaction=retrieve
i spoke with a lawyer actually and first that thaught it was fraud but then she came to her senses and said well all your doing is buying the home and leasing it back to them with the option to buy. Once you acquire the home then take out a line of credit or second mortgage. This was coming from a lawyer. SHe just told me to keep it simple,
I have never purchased a home pre-forclosure and then rented it back to the owner. The likelyhood the former owner will make timely rent payments to you is slim. Not trying to knock your idea, but realistically the former owners will not be able to afford the rent.
more and more "foreclosure consultant" law be enacted.
[ Edited by whitebb on Date 08/24/2007 ]
Several states are/have instituting laws that are targeting this exact type of deal because it is one of the common scams.
In IL we have a low that makes it illegal to pay less than 82% FMV and then lease back to the previous owner.
This is very borderline stuff.
Try the Homeless Prevention program with Derrick Ali
Thanks for replying,
I was going to try a Simultaneous Closing, and pull in an end buyer. I am considering a loan modificaton now that I see your post. If I can reduce the payments, I will make payments and use your strategy and do sub 2.