Situation

[Jennifer Fernéz]

I'm currently looking to buy and flip homes.

I just got off with a home owner who is facing forclosure and under distress.  The home is estimated to be worth $225k and they owe $92k on the loan.  The home went up for auction this July and did not sell.   It is going up for auction again in September.   The home owners are still living there and are looking for any help.

I'm interested in buying the property.  How would it work?   Here is what I'm thinking:

I buy the property for a fair deal, say $150-$170 depending how much work the property needs.   The home owners make out in the deal because they can pay off their loan and end up with a net $50k cash to help them get back on their feet.  Then I sell the home and make a profit.   Can it work like this?

[Marcia Maynard]

Ask them for all of the details of their mortgage(s), taxes, utilities, maintenance, home improvements, etc. and what has transpired, chronologically, to see how they got to this point.  Then verify if all they told you is true.  Bet you will find some discrepancies.  Many people take equity out of a home with a second mortgage.  Could that be part of the situation here? Perhaps the property is more encumbered than meets the "ear."  

Remember human nature is to hear what you want to hear, see what you want to see and believe what you want to believe.  You need to collect more concrete information.  Then present the scenario with BP as more than just "situation".

Also, how well suited are you financially and experience wise for this type of real estate investment?  What are your short term and long term goals?