Seller Filing Bankruptcy (needs to sell)

[Jon Bonczyk]

I am working with a seller right now, He bought the house a year ago for $127,000 for 3% down. He is selling because he is moving back in with his wife. He owes $119,000 on the house and My purchase price maximum is $95,000 considering the minimal repairs and NOI. The Seller is filing chapter 7 Bankruptcy because he lost a bunch of money with a a bad investment. I don't know a lot about bankruptcy but I'm pretty sure he cant make any money on the sale of the house( the sale of the house is unrelated to the Bankruptcy). I want to work out a deal with the seller that will get him out from under the property. I'm hoping to get some creative ideas from some of you guys. Is a short sale his only option? If so what is the effect of that?

[Patrick Strain]

I did this on a property last year. I got in touch with the president of the bank who owned the seller's mortgage, and bought the mortgage from them. Then I had the seller sign the property over to me. The bank was more than happy to take a loss on the property, because they knew they were likely to lose more if the owner went through with the bankruptcy. I got a killer deal on the property, the bank got out from under a troubled mortgagee, and the seller avoided bankruptcy. Everybody won.