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Author: culcha Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 13935  
Subject: two scenarios Date: 6/20/2013 9:38 PM
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DW has been running our real estate rentals -- but not so well.

(1) In one case, a tenant consistently paid the rent "in part" -- so that he ended up with a considerable amount due, and DW was unable to make several recent mortgage payments. Eventually, the house went into forclosure and was auctioned off by the county. She herself located a buyer for this house, but was unable to close the deal before the foreclosure. So that buyer outbid everyone at the auction and it was arranged that he would buy the house at the price that he and DW agreed upon, (which was his bid price). OK. So as I understand it, the county will give possession of the property to the buyer. DW says she will still get a large chunck of that money, after the bank recovers what it is due and the county imposes some charges for the time it held the property, etc. Anyway, this is what I understand from what she is saying. Does this make sense?

A footnote to this scenario: she tells me that the original tenant (who was paying the rent "in part") will be evicted by the buyer, but will be under some kind of repayment plan to her ("since he's basically an honest guy.") This seems pretty incredible to me, as I see no reason for him not to just disappear to another city.

(2) in this scenario, DW wishes to save a certain property from foreclosure, and has located a buyer who will buy it at a fraction of its cost, wth an agreement to sell it back (at a slightly higher price) in six months (by which time she believes she will be better able to handle the mortgage payments). She wants to get it back because the people who are in there now want to buy the property in a year or so; she'd really like to sell it to those people right now, but they can't pay now.... So that's scenario #2. Does that make sense?

Are there some serious red flags in these scenarios? To me it all looks stange, but she insists she knows what she's doing.

culcha
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