Avoiding a short sale through creative financing

[Chris Pontello]

Hi BP community!

Have an interesting situation, looking for ideas on the best way to solve a problem for a distressed homeowner.

The family purchased a lakefront property in a nice area three years ago but then ran into a series of issues, and have abandoned the place because of them.

They are hoping the bank allows a short sale (asking for roughly $20,000 under what is owed)

Here's what's made them so unhappy:

Anytime they used the laundry it was dumping into a dry well, which would back up into the house forcing them to take their laundry to a laundromat instead!! The family has three kids, could you imagine taking all that to a laundromat!

In addition to that, the septic tank is undersized for the size of the home. They were getting it flushed several times a year!

Because of the frustration, when asked to purchase the large lot in front of their house which leads to the main road, they turned it down. This has created a "shared driveway" with the neighbor making an ugly curb appeal, not to mention cutting their lot in half. Who bought the lot in front of their house for $20,000? An auto body shop across the street that "stores" cars needing work there.

Since abandoning the home, major landscaping would also be needed to clean up the walkway to the water.

There are no pictures of the inside, yet, but no major interior renovations were mentioned.

- My first thought is offering cash, but the home owner would most likely just let it go to foreclosure because of how low the offer would be.

- My second thought is offering some cash and taking over the loan - there are no liens on the property yet.

The agent turned down a seller financing option - although it was not ran by the seller - because the agent said the seller is so done with the property that she wants nothing to do with it at all. However, I didn't lay out what that seller financing offer would look like because I'm really not sure if a deal can be made or how that financing would look.

I'm hoping to find a way to get the home owner some money in her pocket if possible, although I need room for an investor to fix the issues and hopefully buy the lot back from the auto repair shop.

Please share any ideas you have!

Thanks!