Purhchasing A Property Note
Let me give a scenerio to explain my question. A house is in Pre Forclosure with only one mortgage and 50,000 remaining but the home is worth 100,000. If i were to pay the 50,000 to assume the forclosure position and then for some odd reason no one bids on the home do i become the owner by default? Or what if i were to purchase the note and then decide to call off the forclosure , is that possible and does that mean that the owner of the home remains the owner unless i were to start the forclosure proceedings again? What would be the pros and cons of purchasing a property note?
Thanx
Should you buy the note, you become the beneficiary of the note i.e. the borrower is then to pay you as per the TERMS OF THE NOTE. This means that your money could be tied up in the note for the remaining 20-some years left on the note, assuming that the note is a 30 year fixed without a balloon.
IF you elected to foreclose, you would then likely become embroiled in a chapter 13 bankruptcy case that the borrower would more than likely file because THEY are going to LOSE 50K (this example) in equity that THEY have, NOT YOU as the beneficiary.
And you need to understand THERE IS ALWAYS A BID AT THE TRUSTEES SALE: The beneficiary is the one placing the first bud, others are then allowed to follow and bid higher if they like. So the property ALWAYS sells at sale.
Assuming that you do make it as far as the trustee sale, you will likely not become the owner of the property because there will be others that are following it to get a good deal. Thus, at the end of the day, you collect a few late charges, some interest, your attorney fees that you have spent and no time for your work and/or use of your funds except what I have mentioned.
The moral of the story: IF you intend on owning a property, becoming a lender is not the easiest way to achieve that goal…
Thank you that was very informative..
In some states a quick claim deed is only valid betweeen a husband and wife ( consult an attorney) for your state. You would be better off contacting the prvious owner and offering $50 to a $100.00 to
buy his interest and all persons listed as owners of the property possibly a wife? Purchase thier right to redemption as since some consideration (money changed hands) this makes a valid contract in a court of law. ( protect yourself ) be sure to get this agrement notorized.
Most of the guys that I fund deals for are most successful by knocking on doors and being very personable. It takes a grewat deal more time, but they are more successful than other sI fund for.
my main goal is to get them to call me. hink of some creative ways that you can that to happen.
I knock doors and do mailers, however door knocking is better.