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Updated over 5 years ago on . Most recent reply
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Would you risk this?
One of my cousins just informed me that their house is in foreclosure. Even though I've been touching base with her every couple months, she JUST NOW told me that their time is up in 5 days, so if we do anything, it has to be fast.
My husband and I are investors in Indiana. We do have interest in the Dallas area but hadn't felt quite ready for the dollar amounts in the DFW area. However, this has me practically salivating so I want to know your opinions. My cousin owes $210K on her house in Desoto and says that a the realtor she talked to said that it should go for about $260, as is. Fixed up, it would fetch more (it's a high-end house and when I looked at comps, it seemed like over 300K).
There are about 3 rooms that need cosmetic work (painting, small patch of drywall in one room). She is just hoping not to have to walk away and lose all her equity, so an offer of $230 would fly, she said.
Here's the rub: We just paid cash for a duplex that I haven't gotten financed yet, so most of our cash is tied up. We don't have 40 grand for a conventional downpayment, so would have to get a hard money loan or something akin to that in order to make the deal possible. Our credit is solid, so getting loans are no problem.
What kinds of options are possible as far as financing . . . or would you even try this? Please throw any and every thought my way, whether it's to help me purchase it or to help her get out of her mess! Thank you!
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@Constancia Russell This isnt really a deal. I think Im also not seeing what your exit strategy is. Your cousin says she owes 210k correct? Is that her complete payoff? In my experience with homeowners in foreclosure they usually dont have a solid grasp of what the true payoff amount is for their house. Have you gotten this information? Im guessing its going to be higher than 210 if you include all the late fees etc.
Also, the foreclosure auctions here are the first Tuesday of every month. So you have until Oct 1 to get this done. Hard money isnt going to move that fast. Your best bet is to find out what it takes to bring this loan current, bring the loan current and THEN discuss options with your cousin. I would definitely have your cousin sign a purchase agreement with you prior to you writing a check to bring the loan current in case they get amnesia once the threat of foreclosure has been abated. Thats honestly the only thing you can do between now and Tuesday to get this deal done. Unless you plan on paying the loan of entirely. Once you stop the foreclosure clock you could look at taking the loan subject to, which would be great for you because then you wouldnt need financing. You would just have to cover the cost of whatever rehab is needed. Its worth trying depending on the terms of your cousin’s loan.
Feel free to reach out if you have questions. Desoto is a great area! Good luck!!!!