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Brad Category: Business Strategies
Current Grade: A
Total Views: 762
Member Comments: 5
 Posted on: 06/15/2007
Posted by: Brad
Blog Points: 549
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I had a thought about a possible solution for those facing foreclosure and I wanted to run it by a few people here to see for one if it's legal and two if it would work.

What I'm thinking about is if someone is facing foreclosure and I buy on a short sale for less, then turn around and do a lease option with the same seller for a price higher then what I paid.  Here is a scenario that I'm thinking of.

I buy a property with a mortgage of $100,000 for $80,000, then turn around and do a lease option with the same homeowner for $100,000 or whatever amount around that number that works.

Are there any legal problems with doing this and is it just bad business to sell back to the same owners?

Thanks for you help,

Brad

Current Grade: A
Category: Business Strategies
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DenverCapitalInvestments

Posted By: DenverCapitalInvestments on 04/28/2008
Brad, I totally understand (see my "Help" forum post and Bullentin"), I am thinking the same thing. Get the house cheap, low payments, and let the family stay paying the lower payment. It does nothing for me in the short term, but I have someone buying a house FOR ME, and they get to stay where they have been for 7 years! Sounds like I have lifelong renters. They were burned by the rise in the variable interest rates. Payment went from $500's to over $1000 per month.
 
Brad

Posted By: Brad on 06/16/2007
Thanks for the advise. I don't have any plans on using this method, I was just wondering if this was a workable way of a win-win solution to add to the arsenal. Thanks again.
 
brandonferry
Ambassador
Posted By: brandonferry on 06/16/2007
Take Sean's advice, Don't do it no matter what story they tell.  If they were responsible they would have worked out a deal with the bank, you will get burnt just as bad plus they will have remorse and feel you are screwing them and probally destroy your property.
 
Brad

Posted By: Brad on 06/15/2007
I'm just thinking that some people don't want to sell their house and move.  Sometimes people just have bad luck like a job loss or something and they just cant get caught up on bills.  They can make the montly payments but can't pay the three to six months they owe.  So I just thought if you short sale the mortgage and the house is in decent shape with no repairs and they can afford the payments.  Why not?  Why not even if you just make a few thousand, your helping people out and making some money in the process.  Just some thoughts.  I appreciate your feedback.
 
Real Estate Investor
EducatorAmbassador
Posted By: Real Estate Investor on 06/15/2007

Brad,

Great Question.

What makes you think the "same seller" is going to pay you? I would never reccomend doing this - I can tell you experience, it is a bad idea.

As far as legality - there is nothing illegal about it.

Sean