Join the Rich Dad Community Forum and learn about cash flow.

Login
- Username: Password: Forget your password?

Articles Blogs Events Calendar Forum Glossary News Feeds Tools Updates

First Time Real Estate Investors This forum is for discussion about getting started in real estate.

Rich Dad > First Time Real Estate Investors > Renting a foreclosure to the foreclosee?

Member

Member

Andres - 6/27/2012 10:12:44 AM

Renting a foreclosure to the foreclosee?

Planning on picking up a house through a sheriff's sale. Is there any legal reason why I cannot turn around and rent it to the newly dispossessed former owner? Saves me the problem of evicting them, they are amenable to that option and it looks like a win-win. Heard somewhere that there might be a law against this?

Reply | Quote


Valued member	gold - 6/29/2012 12:15:21 AM RE:Renting a foreclosure to the foreclosee? Different places have different regulations about the foreclosure. Wish all the best. http://www.selldiablo3gold.com Reply \| Quote


Valued member	gold - 6/29/2012 12:15:25 AM RE:Renting a foreclosure to the foreclosee? Different places have different regulations about the foreclosure. Wish all the best. http://www.selldiablo3gold.com Reply \| Quote


Member	Andres - 6/29/2012 8:55:11 AM RE:Renting a foreclosure to the foreclosee? Pennsylvania, specifically. Thanks... Reply \| Quote


Member	RichLinn - 6/29/2012 2:06:09 PM RE:Renting a foreclosure to the foreclosee? I dont know about the law but my first thought is that if the person could not pay their mortgage they likely cant pay my rent!!!! My rent should be equal to or more than their mortgage since im making a profit after paying a mortgage..... Just a thought. Reply \| Quote

Member

Member

Andres - 6/30/2012 7:13:53 PM

RE:Renting a foreclosure to the foreclosee?

I hear you. However it is also common for people to have an upset that causes them to fall behind on their mortgage. Once the upset is past, they have enough money to continue making monthly payments, be it rent or mortgage, but not enough to catch up on the missed ones.

But thanks, your point is valid and appreciated.

Best,

Andy

Reply | Quote

Member

Member

Steps - 6/30/2012 10:21:58 PM

RE:Renting a foreclosure to the foreclosee?

well if the property has gone through the forclosure process, I don't believe the forclosee has any more say to it. Now if it is a short sale where the soon to be forclosee is selling you the property before they become void then renting definitely. I am not an attorney at all so you would definitely have to check.

But as far as the actual renting. it would be wise to first figure how much per month the forclosee was paying and could not pay. determine what the forclosee can pay before doing any thing then start crunching the numbers.

In response to RichLinn's post. If you get the property in forclosure, typically the payments after forclosure will be less then thepre forclosure payments. therefore giving the investor the potential for more money. you should always engineer the deal where you can have a positive cashflow

Reply | Quote

Member

Member

Marcus - 7/1/2012 11:36:53 AM

RE:Renting a foreclosure to the foreclosee?

It would benefit you to be using an attorney when conducting real estate deals, so it will also benefit you to have a legal advisor that is helping you conduct sales, and answer questions that are specific to your area. This is an important part of building your team. You want to interview your legal aid well, and insure you can trust them to give you sound advice. You also do not want to be doing all the work yourself. You want to pay people to leverage them to get more done. If you are in it to make a profit, they are going to help you make your profit quicker, and you want to find a very competent lawyer, and pay them well. Do not be cheap, and do not think you can do it yourself to save money. You may end up spending a lot more time on it then you originally planned, and more prone to mistake, due to a lack of experience.

Best of luck,
Marcus

Reply | Quote

Member

Member

KendrikHawk - 7/1/2012 12:31:55 PM

RE:Renting a foreclosure to the foreclosee?

I've heard of doing this before. I don't think there's any law restricting whom you may rent your property to, which is what the real question is. Once you have the deed to the property, it's yours to deal with as you will (within the law, of course), and so far as I've heard, you can even sell the place back to the former owners, using a lease/option, or whatever. It's yours, and a previous lien-holder has no say as to what you do with it.

Reply | Quote

Member

Member

Andres - 7/2/2012 10:08:59 AM

RE:Renting a foreclosure to the foreclosee?

Thank you, that was precisely the question, and I appreciate you sticking to answering it. :) Most everyone else's replies, they are appreciated, but don't assume to know what I am or am not doing. Was just looking for a simple answer to a simple question, based on someone's experience in the matter. I am consulting with my advisors. I just don't have them on a leash yet, so figured I'd check here to get a head start.

Best,

Andy

Reply | Quote