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Stopping Foreclosures With A Straight Sale
| | Sunday, January 30, 2005 @ 05:19 PM EST
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Contributed by: John Michael
John Michael Properties
Read more archived articles about Foreclosures
As an investor the easiest way to help your property owner to avoid foreclosure is by way of a Straight Sale – If the property owner has sufficient equity and you have the funds or credit to purchase the property this will save a lot of time and headaches for you and your property owner.
If you are able to provide the lender, trustee or sheriff with a purchase contract and proof of funds many will delay the proceeding to allow you to close on the transaction even at the last minute.
You can also work on a creative strategy by helping your customer convince the lender that this would work as a WIN - WIN for all concerned. If the lender sees that the borrower has equity and is making serious efforts to market, the property the lender will generally delay foreclosure for a reasonable time to allow the property to sell. The lender will probably require the borrower to make full or partial payments during the marketing period to keep the overdue balance from growing. And you can do this on behalf of your customer to show good faith and allow you time to find a buyer for a profit flip
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This can be an option if:
* The properly can close within a short time frame.
* The property owner is willing to sell the property below market value.
* At the anticipated sale price, there needs to be enough equity in the property to repay the outstanding balance due and sales transactions costs.
As an investor, you need to ask yourself:
Do you have enough time to market the property?
So many think that it takes months to sell a property or that A property has to be in good shape to and this is not always true sale (this is what wholesaling is all about). If your comps show low market time and you have a strong market this method will work the best for a fast flip and put money in everybody's pocket with little out of pocket on your part. This is a WIN - WIN.
Now you have to be realistic in your selling price and not to hold out for the best price possible.
If the property is close to foreclosure, negotiate with the lender for a delay to get the property sold. You should consider selling the property at wholesale just to avoid any sell delay
You also need to be asking yourself:
* Will the condition of the property prevent approval by an appraiser?
* Will the condition of the property prevent approval by an inspector?
* Do you have enough cash for your customers deposit and first month's rent to move them out quickly?
Selling a property can involve problems and you need to avoid this strategy if you are not making a strait purchase and using the creative side if:
* Substantial repairs are needed.
* Negative equity
* Lender is unwilling to provide any extension or delay in the foreclosure proceedings.
Note: John Michael is the author of many guides that can help you become more successful as an investor. See http://www.thecreativeinvestor.com/ChanPart-JohnMichael.html
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you creative stopping borrower selling this property making
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