trying to buy House In Bankruptcy

[Jake Langley]

I am attempting to buy a house from an owner who is in Bankruptcy. It is a rental property and it is in disrepair, the tenants have not paid for over a year and the owners are $14k in arrears. I talked to the seller today and he is sending my offer to the Trustee. I understand we may need get a motion to sell from the judge. my first offer is to have the seller put the property in a land trust and assign the benificial interest to my LLC, and pay them a fee for this as well as take over the underlying loan, pay the arrears and get the loan reinstated. My second option is to pay cash for the property at the payoff price of $96K. Do you think a Judge would agree to this?? any advice would help

[Ron S.]

Originally posted by @Francisco Feliz:

thank you @Ron S. So in terms of less “rare” situations, what are your more favorite and effective lead types, if not BK? What has been working for you recently? 

...for others in this thread?

Thanks. 

 I'm a lender so, I'm not on that side of the fence. I can say from the lender's perspective that we (lenders) have a LOT of control on whether or not a home subject to bankruptcy protection, gets sold through the BK courts. That said, I find that the investor gets the biggest bang for the buck when they are on the courthouse steps with cash in hand ready to purchase at foreclosure sale. Wholesaling isn't the panacea it once was. Short sales are fewer and farther between, and the litmus test required to be a party to a short sale is becoming more difficult. You have to compete on the open market with other potential buyers so, getting the deal and getting A deal isn't what it was. "Pre" foreclosures still exist ("Pre" is kind of a misnomer....it's either in foreclosure or it isn't. I've always kind of chuckled at the "Pre" designation) but, getting to one and having the time to complete it before sale, and having the numbers work out, require skills and timing that many don't have. In many areas of the country, those preforeclosure contacts also subject you to the label of "foreclosure consultant", which my subject you to licensure and regulation and being ignorant of that, will not provide a defense or protection if it doesn't work out for you and the homeowner. I'd also say, at least from my perspective, "I'm trying to make it a "win win" for everyone is more urban legend than reality. Saying you are saving them from bad credit, you are giving them walking away money, or whatever else your schtick may be to get the homeowner to give you the equity they may have (At the end of the day, you aren't doing the deal for their benefit, you are doing it for your benefit) could put you into a precarious position when dealing with already distressed homeowners. You may get the attention of some regulatory agencies or some relatives that want to know why your "helping" of the homeowner is taking money out of their pocket and putting it into yours. Nothing wrong with that but again, you might get more attention that you want and "helping" them isn't usually the most solid position to approach it from.

Just my two cents for what I see in this neck of the woods.