Trying to figure out how to do this

[Jesse Jaramillo]

I found a deal that I need to figure out how to work. There are two properties that would sell for about $85k each next to each other ARV. The owner is about to lose one property to auction and owes $12,000. The other property is free and clear but she is behind on property taxes by $4k and about to go to hearing(not tax sale yet). I would like to buy both properties. I could remodel each one for probably less than $15,000 each. I have talked to the owner and she doesn’t have regular work and had some health problems which has placed her in this position. She rents out the unit she owes money on to her niece and I don’t think her niece can help out. I am trying to see if there is a way I can make this work. I tried to see how she would entertain me purchasing both for $50k total. She didn’t bite. Could I offer to do a private mortgage for her? If she defaulted would I have to do a public auction? Could I just foreclose and keep the properties? It feels unethical to try something like this but I am not sure how else to go about it. I wouldn’t do the mortgage to try and foreclose to get the properties but I wouldn’t do the loan for long term or cheap either. Any suggestions from those more experienced is greatly appreciated. TIA

[Ned Carey]

If you loaned her the money to keep them from being lost then yes you would have to foreclose, and yes you would have to have a public auction as part of the foreclosure process. You cannot just foreclose and keep the properties.

Of course you can bid at the auction too. If you bid the amount you are owned and no one else bids then you get the properties without paying any more money. That is how banks wind up with the properties. They go to auction but the bank is the tip bidder. 

Important tip: just be cause someone should be motivated does not mean theyare motivated. Offer what makes sense for you. That is the best you can do.