Pre-Foreclosure Deal Structure Advice

[Ashton Fry]

Pre-Foreclosure property. Seller is behind $24K and the Bank states buy out is $491K. Seller purchased home for 340K in 2005 so that buy out seems very high. Monthly payment is currently $1700. Property value is estimated $550K and property could rent for +$3000. Repairs estimated $5K. Seller not interested in monthly payments (Sub to) on first approach. Does not have family or friends that can help. Did not want to list with agent. Gave up and accepted foreclosure and submitted for bankrupcy. Seller just wants to get it out of their life.

1. How can I verify bank's buy out?
2. Is the bank buy out negotiable?
3. Any advice on how to structure this?

Thank you in advanced!

[Tom Gimer]

The owner can request a payoff.

The bank's payoff is only negotiable in the context of a short sale and the property is not currently underwater so that's out. It's likely the owner has refinanced multiple times since acquisition so the $491k could easily represent principal + interest + fees on the latest loan.

This isn't a wholesale deal as you're already at 88%+ of ARV without considering closing costs. Subject to (no wrap, just some cash in pocket) held as a rental might work.

Seller would need to dismiss the BK to do anything at this point. The foreclosing lender will eventually lift the stay and the property will be sold or taken as REO.