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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Probate plus foreclosure. Now what? Posted by Rick, the Probate Guy on August 08, 2006 at 2:22 PM In Reply to: Probate plus foreclosure. Now what? posted by Martin on August 08, 2006 at 10:13 AM Martin - Remember these two truths about heirs: 1) All heirs know how to add, but not subtract 2) Everybody wants to go to heaven, but nobody wants to die That being said, your contact is asking for you to put a band-aid on a very problematic, legal matter. What will you secure his performance with? He doesn't own the property nor does he have any court powers. Who's to say that there won't be all kinds of slip and slide, peek and hide problems with either the other heirs, or your contact himself? You need to have some way to bulletproof your deal. Also, making a loan for $5K and getting back $20K ($15K profit) would not look very good to a probate judge, who could (and would) most likely toss you out as an unsecured creditor. Not good. Lastly, you don't indicate what state that you're in or the county. This info could attract more Staet-specific solutions from persons posting here. Rick Harmon ======================================================= : I bought a list of pre-foreclosures in my area, and sent out some postcards last week. Yesterday, I got my first call. : The guy calling said his mother-in-law, who owned the house, passed away, and he thought his sister was taking care of the payments, but has recently learned she wasn't. : There are some old (18-year-old) loans for $80K, which have to be pretty paid down by this point. Comps are around $200K. The guy says he just wants $5000 to bring it current and fix it up (carpet, paint, doors), at which time they plan to sell it. With all the equity, and the low cost of entry, I'm thinking if I can't put together a deal here, I'm probably not cut out for this business. : And yet, I'm not sure where to go next. I asked him if he'd talked with the bank, and he said they told him he only needed to come up with $3500 for the delinquency and lawyer's fees right now. I didn't ask him why he didn't just borrow the money from them, but I'm assuming it's probably because he doesn't legally own the house. : I'm going to call him back today, and ask about a will and probate, but I'd like to meet with him and try to tie this up. It sounds like he's hoping for a loan from me, and I don't see that as a viable solution from my perspective -- if the house is re-sold in 6 months, any worthwhile profit on my $5000 investment is going to be usurious. : I'm thinking that I need to probe a bit, and get him to tell me that he can't get a conventional loan because the probate questions haven't been resolved, at which time I'll propose to buy part of his interest. I'll explain that he and his wife may or may not have an interest to sell, which means I'm taking a chance, and I'll need to prospect of a reasonable profit to make the risk worthwhile. : I'll also probe a bit to see if the $1500 he's asking for over and above the $3500 he needs to solve the problem is for the fix-up, and whether that figure is reasonable or whether more money will be required. Also, who will be making the payments while it's fixed up and sold, and what their sources of funds are. : Is it reasonable to ask for my $5K plus $15K profit on the backend, if the only funds I provide are the $5000 up front? Is this the best way to handle it? Any and all suggestions are welcome. Thanks. Follow Ups: Re: Probate plus foreclosure. Now what? Martin 4:18 PM, 08/08/06 (0) Re: Probate plus foreclosure. Now what? Martin 3:28 PM, 08/08/06 (1) Re: Probate plus foreclosure. Now what? Sarah 3:12 PM, 08/13/06 (0) Post a Followup: Name : E-Mail : Subject : Comments: : Martin - Remember these two truths about heirs: : 1) All heirs know how to add, but not subtract : 2) Everybody wants to go to heaven, but nobody wants to die : That being said, your contact is asking for you to put a band-aid on a very problematic, legal matter. What will you secure his performance with? He doesn't own the property nor does he have any court powers. Who's to say that there won't be all kinds of slip and slide, peek and hide problems with either the other heirs, or your contact himself? : You need to have some way to bulletproof your deal. Also, making a loan for $5K and getting back $20K ($15K profit) would not look very good to a probate judge, who could (and would) most likely toss you out as an unsecured creditor. Not good. : Lastly, you don't indicate what state that you're in or the county. This info could attract more Staet-specific solutions from persons posting here. : Rick Harmon : : ======================================================= : : I bought a list of pre-foreclosures in my area, and sent out some postcards last week. Yesterday, I got my first call. : : The guy calling said his mother-in-law, who owned the house, passed away, and he thought his sister was taking care of the payments, but has recently learned she wasn't. : : There are some old (18-year-old) loans for $80K, which have to be pretty paid down by this point. Comps are around $200K. The guy says he just wants $5000 to bring it current and fix it up (carpet, paint, doors), at which time they plan to sell it. With all the equity, and the low cost of entry, I'm thinking if I can't put together a deal here, I'm probably not cut out for this business. : : And yet, I'm not sure where to go next. I asked him if he'd talked with the bank, and he said they told him he only needed to come up with $3500 for the delinquency and lawyer's fees right now. I didn't ask him why he didn't just borrow the money from them, but I'm assuming it's probably because he doesn't legally own the house. : : I'm going to call him back today, and ask about a will and probate, but I'd like to meet with him and try to tie this up. It sounds like he's hoping for a loan from me, and I don't see that as a viable solution from my perspective -- if the house is re-sold in 6 months, any worthwhile profit on my $5000 investment is going to be usurious. : : I'm thinking that I need to probe a bit, and get him to tell me that he can't get a conventional loan because the probate questions haven't been resolved, at which time I'll propose to buy part of his interest. I'll explain that he and his wife may or may not have an interest to sell, which means I'm taking a chance, and I'll need to prospect of a reasonable profit to make the risk worthwhile. : : I'll also probe a bit to see if the $1500 he's asking for over and above the $3500 he needs to solve the problem is for the fix-up, and whether that figure is reasonable or whether more money will be required. Also, who will be making the payments while it's fixed up and sold, and what their sources of funds are. : : Is it reasonable to ask for my $5K plus $15K profit on the backend, if the only funds I provide are the $5000 up front? Is this the best way to handle it? Any and all suggestions are welcome. Thanks. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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