Have you all ever heard of this...

[Tracy Humphreys]

A friend is doing some REI in Pittburgh PA.

She said she found a guy who has these "penny foreclosures" where he sells them to her for anywhere from 13,000 to 21,000. Since she doesn't have cash to pay for them, he helps her to finance them through a hard money lender.

So here's the deal.

House cost $15,500
Hard money lender cost - $10,800
for a total of $26,300 so she's financing this amount. I believe the Hard money lender is charging 70% which is CRAZY!

She has to have the house rehabbed and since the company offers this service, she's paying $9600 to have the house rehabbed. She said they send weekly progress reports and pictures.

While the rehab is going on, she's going to be paying the hard money $580 per month which is the mortgage amount.

At the end of 2 months the house should be almost done, so at this point she will get the house appraised and refinance the house for 80 or 90 LTV get out about 20k cash (the house is worth 60k)for the next house, then she plans to rent the property. What do you all think about this...have you heard this before??