Foreclosure deal Im iffy about?
So I just got a call from someone I know that decided to invest in a bunch of foreclosures with a bunch of friends (so he says). He has various listings. Anyhow, here is the thing. he called and said they are selling the properties with a 20% down PLUS he would give me an extra 20K? What do you think is the catch? He says he is just trying to sell the properties as fast as they can since they are making payments on them every month. heehee… it woud be funny if he saw this on ASK. Sorry buddy! Just trying to figure you out. I know theres gotta be a catch. What kinds of questions should I ask him?
Ok… thanks folks but what I am looking for is more along the lines of what kind of “educated” questions I should be asking him or any other person dealing with a foreclosure. I appreciate your opinions but what I am really looking for is answers from people who know the market and can offer real advice on what I should be looking for.
ok sorry… what I meant to say is he will put in 20% of the downpayment. So I dont have to do it myself.
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Tags: 20k, Ok Thanks, Sorry Buddy
sell property | , 25 Jun 10
By jessica r, June 28, 2010 @ 3:09 am
scame!!!!! if you want to get rich. take your money and go find your own forclosure . then fix it up thats a sure thing .. you know you are incontrol never invole a second party
By LAURIE, June 30, 2010 @ 7:17 pm
Ask to see the paper work and tell him that you will take it to a real estate attorney to look it over and do some research. Too many scams and too many people getting involved in get rich schemes
By HerbS, July 2, 2010 @ 4:17 pm
Some people will always fall for the “you can’t lose money in Real Estate” line. Yet often, especially right now, people are losing money, big & fast. Don’t fall for the lines, don’t get involved.
By heyteach, July 6, 2010 @ 3:56 am
Not entirely sure I’m following: you can have a foreclosed house for “20% down” (whatever that price is–how is it determined?) and he will GIVE you $20K? How, cash under the table, a credit toward the purchase, what? If you don’t have 20% of the buy down you will have PMI, so maybe that’s what’s magic about 20% to him, but I’m not understanding the $20K–is it effectively just adding it to the mortgage so you have $20K equity out? I’m sure what’s “funny” is in the pricing/mortgage aspect of the deal.
Moving past that, which is where the “catch” could be, if you are considering buying a house you should get either a buyer’s agent (even if you have to pay out of pocket as you might in this case) or an attorney. You want a home inspection–a few hundred VERY well spent.
Would you live in the house? Would you rent it out? Would you try to flip it? If you want to live in it and it’s a good buy (get comps, etc.) and checks out, probably OK.
If you want to rent it, you’ll likely have a lot of competition and it might not be a great investment move right now.
Flipping is probably not a good idea right now because of the market.
So not sure why you’d buy a house right now from this guy. It could be that they really misjudged the market and assumed that within a few months they could turn a profit on houses as they’re getting them “under value” in all likelihood, but there are issues with people having the bucks to buy, so the “value” of the house is not the whole story. As it sounds like you two are not really tight, I have doubts he’s doing you a favor (and so do you) and it sounds like he needs to unload properties and just thinks you’re someone who could get financing. I’d want to see the price, the bottom line figures, and the property. If it looked interesting, then get some pro (agent or attorney AND an inspector) and take it from there.
Good luck.
By don l, July 6, 2010 @ 5:07 pm
I’m not sure how you are supposed to participate in this scheme. Are you going to purchase the properties before they sell them to someone else? Will you be responsible for making payments while they are being sold? If this is all the info you got on the deal I’d say pass. If you are buying the properties they will be depreciating every day that you have to hold them. I’d like to hear the rest of the story.
Don