New Investor Foreclosure Question

[whoosh153]

What is the name of your state? TN
Hi i am a new investor and i have heard about a method of investing which helps both myself and the homeowner. By purchasing a home "pre-foreclosure." By going to a homeowner who has fallen into difficult times, and telling them i will pick up payment of their mortgage, pay all back fees and expenses plus add 50$$ a month to the payment for thei personal cash flow. If i ever miss a payment, they can have back the property, no forclosure needed. Now, my question is, is it legal for them to retain the note, and have me making payments? Also if so, do i LEGALLY own the home? I would write up a contract for such, and pay until i could arrange to get the house sold at a higher price for profit, or sublet,rent it to a tenant for profit. Thanks

 

[seniorjudge]

This whole thing sounds shady and risky to me. I would stay away from such a scheme.

 

[Tommy T]

Don't try this at home, kids...

This is done all the time, you are describing buying a property
"subject-to" the existing financing. It works well for certain
situations, not all the time. And yes, you would be in title, but
this isn't a technique you can do without a full understanding
of how it is done, documents needed, etc. One of the guys
teaching this is Ron LeGrand, you can usually find his materials
at a discount on eBay. You need to study and learn this in detail,
you cannot afford to make mistakes with this or any other
real estate investment method. And, most people will tell you
it's illegal, immoral, and fattening, because they have no idea
how to do it. Get the knowledge, and happy investing!

 

[seniorjudge]

This is done all the time, you are describing buying a property
"subject-to" the existing financing. It works well for certain
situations, not all the time. And yes, you would be in title, but
this isn't a technique you can do without a full understanding
of how it is done, documents needed, etc. One of the guys
teaching this is Ron LeGrand, you can usually find his materials
at a discount on eBay. You need to study and learn this in detail,
you cannot afford to make mistakes with this or any other
real estate investment method. And, most people will tell you
it's illegal, immoral, and fattening, because they have no idea
how to do it. Get the knowledge, and happy investing!

I know exactly how to do this; thus my admonition: This whole thing sounds shady and risky to me. I would stay away from such a scheme.

 

[Tommy T]

Have to agree with seniorjudge, the way whoosh153 describes this, it sounds like there could be shady and risky elements, indeed possibly elevating it to the "scheme" level.

Maybe seniorjudge or another reader could detail all the shady and risky ways this might be done, so everyone will know what to watch out for in avoiding such schemes. In fact, I know a couple that divorced last year, and because it had unfortunately been very emotionally devastating for them, they were very anxious to sell their home, the last issue they had to deal with. They were able to sell it for the price they wanted in about 4 days, in a subject-to transaction. I am going to follow this thread and forward the information to them, in case they might need to seek some legal advice and take some action before this scheme does them harm.
It sounds like it was too good to be true.