Tell me why this wouldn't work. (Disclaimer: It's high-risk and pretty shady!)

[Joshua S.]

So I wanted to explore an idea here, and see if anyone has heard of anyone else doing it. But before I go there, I want to make clear that I'm not ADVOCATING this or any other shady business practices; I'm simply wanting to explore a hypothetical. With that aside...

This idea revolves around exploiting a law that was recently passed that protects a tenant from being kicked out in the event of their landlord going into foreclosure. The law states that the bank must honor the lease of the current tenant until it expires. Couldn't an opportunistic investor approach homeowners who are facing imminent foreclosure, and get them to sign a lease to rent out their home? He might offer them some cash to sweeten the deal, perhaps enough to cover their moving expenses. He would then have a lease at a STEEP discount to do with as he pleases. He could move in himself, or he could sub-lease to other renters and make a handsome cashflow. The new tenants win because they could be getting a nice house at a below-market rent. The foreclosee wins because he's getting cash to move, can collect rent from you for a month or two until the house is taken, and he feels like he's "sticking it to the bank" for whatever it's worth. The only loser is the bank, who as far as I can tell, wouldn't really have any legal recourse... Thoughts?

[Don Konipol]

Joshua S., I see you haven't started investing yet. I don't know if you have potential as a real estate investor, but I can see you have great potential as a real estate guru.