L/O And Pre-foreclosures

Comments(6)

• 
  spurtle_200016th June, 2004

  I do several lease options on pre-foreclosures every week. The way I structure it is to come to an arrangement with the homeowner to allow me to come onto the title, give the owner a 12 month lease with an option to purchase me off the title within those 12 months for X. I will then reinstate the mortgage, get the homeowner current and wait for the homeowner to get in a position to refinance a year from now.
  Best of luck to you.

• 
  MicahM16th June, 2004

  Spurtle,
  
  I have no experience with foreclosures. On average, how many months behind are your customers?
  
  Also, although the owner knows what the mortgage amount is, do you charge them more than that (for your monthly profit)?
  
  How much do you usually charge to get you off the title?
  
  btw, I'm glad you mentioned it, I like this idea a lot. Very creative and always deals with very motivated customers.

• 
  spurtle_200016th June, 2004

  Micah -
  
  I let the homeowner make their normal payment after catching them up. I get paid when they refinance. Basically paying me back everything I came out of pocket with initially and a return on my investment. I usually charge between 10,000 and 30,000 depending on the deal, how much risk, etc.
  
  Sam

• 
  spurtle_200016th June, 2004

  Forgot to answer the first question -
  My customers range from a few months to many, many months behind (yesterday a woman was 30 payments behind due to bankrutpcy). I have found the typical lender will usually begin foreclosure proceedings after the homeowner is behind 3 months.
  
  Sam

• 
  MicahM16th June, 2004

  Thanks for the info, Sam. I never imagined they would be behind 30 months!

• 
  pestoonak19th June, 2004

  Spurtle_2000,
  
  TO reinstate the mortgage do you have to payoff all the overdue amount or do you refinance the mortgage? Also, what is preventing the owner to continue missing payments and even not pay the transfer fee? Even if you have a clause that then charges penalty, a person that does not have the money will not a cannot pay.
  
  Thanks