Structure The Foreclosure Sales Leaseback Or you Might End up in Trouble

Structuring of Sales-Leaseback in A Foreclosure Investment

One of the more effective methods I've found when I locate a good deal is to let the seller stay in the house!

Now you might ask, how does this help me?
Well. It is really simple.

Most foreclosure investors want the house now. They want to buy it, fix it up and resell it for profit.

The owner has a dilemma. He has nowhere to move to. His credit is shot and he will have a hard time renting a new house.

Now imagine for a minute the following scenario.
What if...
You buy the house.
Take a very low adjustable rate.
Let the owner live in the house.
He pays the mortgage, taxes and insurance.
His current rent payments will most likely be lower than what he was paying before.
After 12 months, you sell the house and split the profits with the owner.

You have a much better chance of getting a foreclosure house under this structure rather than trying to be like everybody else pounding on the door.

You need to approach people with their interest at heart if you want to succeed in foreclosure invetments.
Trying to "steal" a house while someone is in trouble is unethical and also can land you in trouble if not structured properly.

I strongly suggest to seek the advise and help of a good attorney when structuring a sale-leasback especially if the owner of the pre-foreclosure house is currently in bankruptcy.

Courts are very carefull these days in making sure people are not trying to avoid foreclosure proceedings by structuring "creative financing" deals.

These creative foreclosure sale-leasbacks can have serious ramifications if they are not structured properly.

filed under: foreclosure investment