Interesting way to buy properties at a low price. Pre Forclosure

[Richard Florestan]

Hi,

I had an idea from someone who said he worked for an investor that used this strategy for building a real estate portfolio and was wondering has any one else tried this or even have thoughts about it.

What the did was find home owners that were about to get foreclosed on and offer them a cash settlement to walk and sign the home over the title them. He would offer between 2k-8k depending on the mortgage, equity inside the home, condition etc. after he made a deal, the original owner would sign over the title at a title company and prepare to leave. The house would still be in the original owners name as far as the banks concerned. He said as long as the title was transferred even thou the liability was still on the original owner, he said that 100% its his house and he didn't have to worry about the mortgage under the original owners name as he would maKe the payments himself on behalf of the original owner. He said that if the investor didn't make the payment, the bank could obviously foreclose on the property but the investor said he could even resell it even thou the lean was under someone else's name.

My questions are
1. Has anyone done this before or thought of doing it?

2. What would you be careful about if attempting?

3. Would a title company be a good resource for more information? Could a title company have an issue with them ?

4. Would I only be able to rent it, or would I have the option and sell it with the first lean paying off the original owners mortgage.

I know this is very similar to finding de-stressed owners but the title is different from the liability owner in this case. He did mention that a new appraisal would have to be done, escrow fees, title fees.. everything but realtor fees

Thank you in advance