Trying to Finance a Pre-Foreclosure into a Rental Property

[Scott Warhol]

Ok, long story short. A seller lead came to us (business partner and I) 2 days before their house was to go on Sheriff's Sale. We negotiated with them that we would pay the arrears and then purchase the house from them for $150,000. The current market value of the property is $230,000-$250,000. I would like to finance it and use it as a rental property. Aside from a hard money loan to purchase and then a conventional refinance... is there any way to approach a lender with this? I know you can't do a gift of equity for an investment property according to the couple lenders I've talked to already. We are also working on getting HELOC's in place to fund this deal and then do a conventional refinance. I just didn't know if anyone on here had done something similar or had any advice to share. It's backward from how I would have normally done it with more time on my side. This was all dropped in my lap so quickly I sort of slapped it all together more to save the house and seller's from getting kicked to the curb. Thanks!

[Scott Warhol]

Quote from @John Morelli:

Private lending and hard money are the tools of the REI trade for a reason; certainty of execution and efficiency in opportunistic situations. Your deal parameters are ideally suited for using HML or a private lender, since your objective is short term, and your exit financing is a clear and effective path.

If you decide to go this route, I would be happy to fund the deal for you and if desired, we can also arrange the conventional or DSCR refinance to exit the interim loan.

Feel free to reach out if you would like to discuss further. 

John

 John, thank you.  That is exactly what I was assuming as well.  I'll send you a private message and we can discuss further.  Thanks!