If doing a Wrap, would I be doing it right?

[Alejandro Flores]

So next week I will be going to knocking doors on pre-foreclosure houses  (2 months before the auction is what I can find) that are newly built ( little to no repairs) I'll explain to them what options they have to solve their problem. Then I'll present the option that could be one of their best solutions. That I can take over the mortgage payment(mirroring the note) and pay the back payments that the owner owes. Saving their credit and saving them from foreclosure. I'll create a wrap using a specific contract that a Real Estate attorney will provide that fits with the law. Then before I agree to everything (closing) I should have found a retail buyer that can owner finance the deal, if not the next option would be a short sale or terminate the contract. To the retail buyer, I would ask him to put a down payment and make the monthly payments (which it will be a little higher than what I owe on the wrap) and I will give them a beautiful 2010 4/3 house. Let's say he agrees, then I would re-sell it to him/her (retail buyer) use another contract I imagine from the attorney. Then use a loan service company to make things easier, and make sure the payments happens till it's paid off. I imagine that's is how it's done if not let me know. 

I would also like to partner up with an investor that has done this before a "Wrap Deal" to make sure I'm walking the right direction. If I find one which I will, I'm willing to give a very good percentage of the downpayment. 

[Jay Hinrichs]

Boy I just cringe at this...  unless you have VERY deep pockets lets look at how this plays out.

now I am going to write out devils advocate here and I am in no way saying this is you I am showing you the other side of the coin so you can look at it objectively.

1. you knocking on doors of someone in financial distress and unless you have been there or have dealt with a ton of owners facing foreclosure you don't really know how hard this is on people on lives on families on children. 

2. your not saving their credit their credit is already trashed if there is a notice of sale.  so to lead them on that you some white knight helping them save their credit is bunk.

3. Double cringe your going to sell to some low down payment probably not financeable person who you have no idea if they are going to be able to carry thorugh.. and the reality THEY WONT they will walk in a few years.. ( @Rick Pozos  that's why Rick says 12 months or less which is all at most you should do).. so I bet you have not thought through as most guru's leave out the other side of the coin.  So let me ask you this switch positions . your seller.. you just deeded your home away you think everything is great.. now the payments are made for a year or so then. stop.. your seller probably has not really fixed their financial position and is now renting and so they can't afford rent and to pay a mortgage on a home they do not own... you as the real nice middle man who solved their problem is long gone you could care less you got your dough you just stuck your seller with basically a sub prime borrower they don't know... house will now finally go to foreclosure because both parties can't cure.. and of course your long gone you got paid you have no skin in the game does not affect your credit.

4. the people you saved cannot get another home because their mortgage is still on their credit.. they are stuck and did not realize it when they deeded it over.

5. your Seller gets way pissed and files a complaint against you at the AG s office as you have taken advantage of someone in dire straights and now they are totally messed up. ( I have rescued investors who this happened to)

So I know there are guru's that teach this and it all sounds good.. but UNLESS you have the ability to cut a check to payoff the underlying at anytime its called then step in and foreclose your lease option or contract for deed folks out.. then this is a horrible idea .. and again I know its taught and on the surfice it sounds wonderful

and it works like I said if your very well cashed up .. but most who do this are not ERGO they want the sub too deal as they see this as leverage into a deal with no personal credit.

Also let me tell you there are sharks out there that do this and walk once they get a few grand ..

in many states you cannot even deal with folks in foreclosure unless your a licensed foreclosure consultant.. our state is that way.

So careful .. think it through .. use the 10 commandments due unto others.

OH and lastly your comment about just walking that one really gives me heart burn.. you lead people on you bail on them and leave them no time to fix their problem when they could have been talking with a real investor or short sale broker that could have actually helped them and is not just looking to help themselves.