Ideas for Selling Back to Former Owner

[Bob E.]

I recently bought a REO from a hedge fund.

The former owner has contacted us and indicated that she would like to stay.  she has the usual hard luck story.  Lost her job, now working for less money etc.

Looking at the numbers, I can seek this to her with a payment that is half what it used to be  and still make a very nice return.  

To do this I need to find a RMLO in Wisconsin that can qualify her for the loan.  

Does anyone know if Wisconsin does Land Contracts  / Contracts for Deed?  If she does qualify I don't want to have her default on the new loan and ave to go through a long FC.

If anyone has a local resource for RMLO / Land Contract please send me a PM.

Any other ideas o how I can make this work with minimal risk would b greatly appreciated.

[Rick H.]

They've all got stories, Bob, but you already know that. 

The only leverage you have is that you own property (or control title) and she does not. 

I don't know about contract for deed in WI. Here are a few ideas to kick around:

Have borrower get a co-signer, or more specifically, a co-guarantor with property with equity that gets added as additional collateral.

Sweeten deal by getting additional collateral like auto, truck, inheritance, anything.

If you are concerned about her performance, negotiate a contract for option. If she does not perform per contract, no option is created. Or, contract with someone other than her but who us close to her (friend or relative).  This avoids a few conflicts that come to mind.

Check out Gordon Moss' website and see how he has dealt with this situation profitably.