Becoming an investor in Pre-foreclosures

Posted by Ronnie Stephens on February 13, 2003 at 17:16:10:

I was approached by a local company about becoming an investor in pre-foreclosures which I am not at all familiar with. They find homes facing foreclosure that have equity in them, negotiate a lease purchase option with the owners to give up their equity, then negotiate with the mortgage holder to accept a smaller paydown. They get a FNMA mortgage to pay of the bank and charge the owner the amount of the note + $150 to stay in the house. After so long a time, the owners are given a way to buy the house back at a pre-agreed value (higher than what they originally owed). That's when the investors cashes out with their equity. They say they need investors who can qualify for loans because FNMA only allows 10 investment properties per investor. Basically they are using you to qualify for a loan. Does this all sound on the up and up?

Follow Ups:

• Weigh the RISK vs REWARD -- if satisfied --OK (nt) - Bill H 23:30:18 02/13/03 (0)

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: I was approached by a local company about becoming an investor in pre-foreclosures which I am not at all familiar with.  They find homes facing foreclosure that have equity in them, negotiate a lease purchase option with the owners to give up their equity, then negotiate with the mortgage holder to accept a smaller paydown.  They get a FNMA mortgage to pay of the bank and charge the owner the amount of the note + $150 to stay in the house.  After so long a time, the owners are given a way to buy the house back at a pre-agreed value (higher than what they originally owed).  That's when the investors cashes out with their equity.  They say they need investors who can qualify for loans because FNMA only allows 10 investment properties per investor.  Basically they are using you to qualify for a loan. Does this all sound on the up and up?


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