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Cole Rottweiler

XYZ Brokerage

Email: cole@xyzbrokerage.com

Phone: (206) 555-1234

Website: www.xyzbrokerage.com

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trinah1

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My Realtor is offering me to buy his rental property on a short sell. It was approved by the bank for $500K.  This house is on zillow for 550k.  He bought this when it was at 675k.  He wants to rent it back and give me 1k more a month for profit.  He will then put a $50k down payment  and will put a lien in the house. Lease would be for 3 years.  He wants the first option to buy back the property after 3 years for fair market value, then he would want his 50k back.   If the property depreciates he will then extend the contract for 5 more years after that.  the reason for all this is that he has a care giving business in this house and is making good money.  The bank is foreclosing on him in a couple of weeks  cause he stop paying for 6 months now.thats why he offered us this deal.  I really need an advise on this BAD.  HELP!!!!!
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December 18 2008 - Orange
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KevinJR

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Sounds extremely dangerous, if not illegal.  Hire a real estate lawyer that has no connection to your realtor to ask if this is OK, and make sure that everything is documented in a water-tight manner.  This sort of long-dated arrangement can easily end in tears, if not in court.  And the related party short sale is most likely mortgage fraud.  If the bank knew about the side arrangement they would never agree to the deal, and your buddy and you will be signing documents saying that there is no relationship, business or otherwise, between the two of you.  So to get the deal done almost certainly entails fraud on both your parts.

If it were me, I would quite simply run like crazy from this, and hire a realtor that does not have a side business in defrauding banks.
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December 18 2008
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NapoGino

Oak Park, Il

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How fast can you run? I have to agree with KevinJR. In some states this is illegal. The legality aside, you mentioned the house was purchased for $675K. This figure has nothing to do with this. What is the house worth NOW?

Taking the numbers you give, you will be paying 81 cents on the dollar. In todays market this is not much of a discount. Keep in mind, if the seller was not able to make the payments before, what makes you think he/she can make them now and stay current?
 
Can you afford to pay for an eviction?
 
Can you rent it out again for enough to cover your costs?

Can you afford to pay all costs on a vacant house till you find another renter?

Could you sell it off fast if you had to without losing money?

Again, HOW FAST CAN YOU RUN?

Gino (NapoGino) Napolitano
Chicago Wholesale and Investor Deals
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December 19 2008
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trinah1

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thanks for the advise.  I will indeed ran as fast as I can.  I don't want to be involve in any illegal dealings in any way.  Its just more of a headache more than anything.  Thanks again.
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December 20 2008
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Robert Tapia, "Avenue S"

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Straw buyer fraud.
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December 21 2008
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FriendshipProperties

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Get a new Realtor.  You can not do a short sale and have $50k in the bank.  The bank is taking a loss and wants ALL cash and assets.  That whole scenario is ridicules. Stay away.
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December 25 2008
 

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