Keep your eye on those weasels!
Interesting posts.
I know a nice responsible lady who lost her high-paying job last year due to downsizing.
She could not find a new job that would pay her enough to keep up her house payments.
After exhausting her savings and 401k trying to keep her mortgage current, she had no
means to keep up her house payment, and eventually the lender started foreclosure.
She listed the home with a realtor, but it did not sell at the asking price, which was only
the amount needed to pay off the mortgage ( plus interest, missed payments, late fees
and foreclosure fees), realtor commission, and closing costs. The house needed some
repairs, and the total amount owing to the lender exceeded the home value by about $20,000.
The realtor did not know how to structure a deal to get the property sold and save the lady from
a foreclosure on her credit, which had been excellent prior to her job loss.
About two weeks before the foreclosure sale was to be held on the courthouse steps, one of
the above mentioned "weasel/predatory investor" types learned of her situation. Using his
knowledge, experience, and contacts, he was able to stop the foreclosure, repair the house,
resell the house to a young family at fair market value, pay off close to $1,000 in back utility
bills that collection agencies were hounding the lady for, and the realtor (who was clueless
about how to save the situation and probably didn't deserve anything) even got paid a full
commission. And yes, the investor made a few dollars too. Summary: The homeowner
avoided a foreclosure, had her outstanding collections paid off, was relieved of a
tremendously stressful situation, saved her credit from major damage, and was able to
move forward with her life. ( She has since found a new job she likes, and is planning
on buying a home again someday).
I know another young couple with two children. The wife lost her high-paying job, and her
husband developed long-term medical issues that prevent him from working more than 24
hours a week. They found themselves in foreclosure. Their house needed major TLC and
updating, so they had no luck selling it. They had what looked like $45,000 in equity on paper,
but the costs of repairs, real estate commissions, and closing costs exceeded that, so when all
the facts and numbers were in, they had no equity. Desperate to avoid a foreclosure sale that
was days away, they called all the "we will buy your home in 7 days" and "we buy ugly houses"
ads.
Long story short, an investor took over the property, stopped the foreclosure cold, and saved
the sellers from a foreclosure on their credit. They were very happy with that outcome, and the
investor was able to repair the property and help another family buy their first home.
I could write about many more similar real-life stories like these. Bottom line, some might not think
it's predatory for someone with knowledge and skills to help out people who find themselves in
situations where they truly need to sell their house in a very short period of time, thus solving
any number of bigger problems that they are facing, including saving their credit from a foreclosure.
I know for a fact that the folks above are very thankful that a "weasel investor" was able to solve
problems for them that no one, even other "real estate professionals", could do.
Are there real "weasel/predatory investors" out there? Of course, in every business there is.
As in any business dealings, people must always do their homework, get pro advice when needed,
and use common sense and due diligence. If someone thinks they are going to sell their home
in 7 days at full market value for all cash, they are not using common sense. If they think that
someone is a predator for expecting a discount in exchange for an all cash closing in 7 days, they
aren't using common sense... even federally regulated institutions charge "penalties for early
withdrawals" from investments. It's about the "time value of money", an age old principle,
and common sense.
That said, there are a lot of folks watching late night infomercials and buying a home study
'whiz-bang-get rich-overnight-with-no cash, credit, or brains, by becoming a real estate
investor" course. These folks all are running ads alongside the seasoned investors, so,
if you need these kind of services, you guessed it, use some common sense! They aren't
necessarily "weasels", the point is that they may not yet have the expertise to actually solve
your 11th hour problem. OK, time to stop, I'm drifting into stuff more appropriate for a real estate
forum somewhere!
