SubTo to Save a Foreclosure, Deal or No Deal

[Xiaoyu Liang]

I was reached out by this property owner who is going through foreclosure and see if I can make her a deal to take over the property. The ARV for this property is about $200k. The rehab cost is less than $80k. Current past due to the lender is $7.7k. Total payoff is $89k due to the lawyer fee and process fee etc. Thinking about taking it subject to. Monthly payment for the house is $310. Thinking about holding the house for 6 months and fix and flip. Is this a deal? What are some of the ways to make it a deal if not?

[Account Closed]

Quote from @Doug Smith:

I handled special assets for a bank and our company has handled non-performing loans and foreclosures for many, many years. I've been an expert witness in foreclosure cases and managed hundreds of foreclosures in my career. I can tell you that you won't be able to subject to a property in foreclosure. They don't want to redeem it...they want it paid off. If you sub-to, you're transferring title. There is no way a competent special assets manager or a foreclosure attorney will not call the loan once it's in this state. Basically, you're buying the Titanic and expecting to put your finger in the hole made by the iceberg. They might refi it in your name...at today's rates...but they won't allow a sub-to. 

I made my first million buying houses in foreclosure using Subject To. Most banks don't want to own properties (REO) they've lent money on and my experience is that Loss Mitigation will go away once you bring the loan current or make arrangements. (I'm leaving out a lot of detail & Trade Secrets Here) but, you get the picture.

 (as I sit here and giggle over what CAN be done, that normal people assert, can't be done) ;-)