START YOUR OWN “BUY FORECLOSURES” CORPORATION with a prospectus to investors to come in with you. SEND prospective
CLIENTS something along the lines of THIS ARTICLE.
~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~^~
HELLO, WE ARE HELPMATE PARTNERS INC. AND WE HELP YOU
STAY IN YOUR HOME IF FORCLOSED, though we also actually BUY FORECLOSED HOMES and
rent them back to OWNER, or one can outright SELL YOUR HOME TO US, depending on
which you are. Or you can be an investor and take your share of the profits as we fix and flip. We
are sending you a sample document to
inspire you to join us. (ED LOPINSKI wrote this, Anita just posted it.)
Background
Ø Foreclosure law suits are
filed in Court against thousands of people in LA County on an annual basis
(26,000 new filings are estimated for 2005).
Ø The objective of our company
is to seek out these people in Los Angeles and offer them an alternative to
losing their home in a future real estate auction.
Ø For eligible home owners, our
alternative is simple, direct and provides a solution which allows them to
remain in their homes, with the right to reclaim it at any time during a 2 year
period.
What We Do
Ø We make contact with the
home owner(s) in foreclosure (both on a mailings and direct “door to door”
basis).
Ø We offer to buy their home
from them while simultaneously giving them an Option to Repurchase it at
any time during a 2 year time frame, whereby they retain possession of their
home as tenants pending the possible exercise of their Repurchase Option
contained in a Lease Agreement. This offer will be made only to eligible
home owner(s) in foreclosure.
Ø Instead of monthly mortgage
payments, the former home owner(s) in foreclosure will pay us rental payments
during the term of the Lease Agreement.
Ø Monthly rent under the Lease
Agreement is approximately the sum of the monthly mortgage payment and
tax/insurance escrow payments previously paid by the home owner(s) in
foreclosure.
Ø After we purchase the home
of the owner(s) in foreclosure, we obtain a new mortgage in our name. We then
pay the required new monthly mortgage payments on the residence.
Ø Proceeds from the new
mortgage are used to pay off the original mortgage of the home owner(s) in
foreclosure, thereby eliminating the payment default and stopping the
foreclosure action.
Ø In summary, eligible home
owner(s) in foreclosure will become our tenant during the term of their Lease
Agreement and pending their exercise of the Repurchase Option contained in the
Lease Agreement (industry research indicates that approximately 30% of our
tenants will exercise their Repurchase Options).
Initial Contact Procedures
Ø On a daily basis,
representatives will be provided with a contact list in their area. The list
will be in the format attached as (Exhibit A), and will include the name and
address of the home owner(s) being foreclosed on.
Ø The contact list is time
sensitive and should be acted upon within 24 hours. Our research indicates that
the sooner we contact the home owner(s) in foreclosure, the more successful we
will be in closing the transaction.
Ø Most of these people work
during the day. We strongly recommend that they be contacted between 5-8 PM M-F
and 10-3 PM on Saturday.
Ø The home owner(s) in
foreclosure is (are) under a great deal of pressure, may be in denial
concerning their situation and may refuse to discuss this matter with you. Mild
persuasion is all right, but if they still refuse to discuss their situation,
leave a brochure and card with them and promise to stop by again.
Ø If the home owner(s) in
foreclosure is (are) interested in our solution to their problem and invites
you into their home, the transaction can be initiated that evening. At this
point, the home owner(s) becomes an “Applicant” or “Applicant(s). The following
documents are required to be completed and/or signed by the Applicant(s):
A.
An Application Letter will
be signed by the Applicant (Exhibit B-1). A copy of this letter will be left with the Applicant.
Under the terms of this letter, the Applicant has ten business days to provide
us with all requested documents. If the Applicant meets this requirement and
they are subsequently not approved by the Company, their Quit Claim Deed (see G
below) and their $500 application fee (see H Below) are returned to them. If
the Applicant does not forward all the required documentation within ten days of the in-house visit,
their application fee is forfeited.
B.
Applicant Status Sheet (Exhibit B-2). This sheet is
used to summarize your notes of the initial (and any required follow up)
meetings with the Applicant(s).
C.
Applicant Information Sheet (Exhibit B-3). This sheet
obtains information concerning the suitability of the Applicant(s) as a future
tenant. Not all Applicants will prove suitable.
D.
Financial Statement (Exhibit B-4). This form
obtains information concerning the financial viability of the Applicant(s). We
will not accept a financially non-viable Applicant.
E.
Letter of Authorization (Exhibit B-5). This form
authorizes us to obtain information concerning the Applicant’s mortgage,
directly from their mortgage company.
F.
Lease with Option to
Repurchase
(Exhibit B-6). This Agreement gives the Applicant(s) possession of the property
during the 2 year term of the Agreement, with the right to re-acquire the
property at any time in conformity with the Lease Agreement. If the Application
is approved, the company will execute this document and will return it to the
Applicant(s). Upon return of the Lease Agreement, the Applicant(s) becomes a
tenant.
G.
Quit Claim Deed (Exhibit B-7). This
document transfers ownership of the Applicant’s property to our company (if the
transaction is not approved, the Quit Claim Deed will be returned to the
Applicant). Note: this document must
be notarized at the time it is signed by the Applicant(s).
An Application Fee of $500 is required. The Applicant should hand
you a $500 check made out to Enterprise/Los Angeles, Inc. The Representative
should mail this check to the Company with the documentation package. If the
transaction is subsequently rejected by the Company, the $500 check will be
refunded to the Applicant, unless the Applicant has failed to provide the
Company with all the documentation requested during the in-house visit within ten
business days from the visit.
H.
Other Document Requirements
(See Checklist at Exhibit B-8). A number of
other documents may be required from the Applicant(s) to evaluate their
viability as a tenant. The only documents we request you obtain from the checklist
at Exhibit B-8 during your initial contact are:
i.
A
recent mortgage statement(s) from the foreclosing mortgage company (and any
from any other mortgages i.e.: home equity loans or other lien positions)
Note:
The other documents required will be via the attached checklist (Exhibit B-8).
These will take the Applicant time to accumulate. The Applicant should be
instructed to forward them to our offices by mail with 10 business days of the
in-house visit.
Summary of Documentation required to be
Forwarded to the Company
The
Application package is now ready to be submitted to our company for evaluation.
A summary of the minimum documents required for submittal are as follows:
Ø
Application Letter (must be
signed by the Applicant)
Ø
Copy or original of the
Applicant Status Sheet
Ø
Applicant Information Sheet
Ø
Applicant Financial
Statement
Ø
Letter of Authorization
(must be signed by applicant (s)
Ø
Lease Agreement with Option
to Repurchase (must be signed by Applicant (s))
Ø
Quit Claim Deed (Must be
signed by Applicant (s) and notarized)
Ø
A $500 Application Fee
(check should be made out to Enterprise/Los Angeles, Inc.)
Ø
Recent Mortgage Statement
Ø
Court papers re: foreclosure
NOTE: The Applicant(s) should be reminded to
accumulate the remaining documents needed per the Exhibit B-8 Checklist and
forward them to our offices within ten business days of the in-house visit.
Acceptance/Rejection/Closing Procedures
Upon
receipt of the Application package, the transaction will be evaluated by our
company. This process normally takes a maximum of 7 business days.
Ø If the transaction is rejected:
A.
The
Applicant(s) will be notified by first class mail.
B.
Their
$500 Application Fee will be refunded, unless the Applicant(s) fail to provide
us with the requested documents within ten business days of the in-house visit.
C.
The
original Quit Claim Deed will be returned.
Ø If the transaction is accepted:
A.
The
Lease Agreement will be executed by one of our authorized signers. A copy of the Lease Agreement will be
returned by first class mail. At this time the Applicant(s) become our tenant.
B.
The
Quit Claim Deed will be recorded by the Title Company.
C.
Our
new tenant will then be mailed a monthly rental bill from our company.
D.
The
commission payment will be transmitted to your central office for disbursal to
you.
Ø Closing procedures:
A.
The
mortgage on the residence will then be re-financed in our Company’s name.
B.
The
foreclosure action will then be halted.
Exhibit A
Format of Daily Contacts
Exhibit B-1
Application Letter
Exhibit B-2
Applicant(s) Status Sheet
Exhibit B-3
Applicant(s) Information Sheet
Exhibit B-4
Applicant(s) Financial Statements
Exhibit B-5
Letter of Authorization
Exhibit B-6
Lease with Option to Repurchase
Exhibit B-7
Quit Claim Deed
Exhibit B-8
Other Documents Required
Checklist
THEN THE PROSPECTUS AND DEAL MEMO is for investors.
<===== BACK
TO THE BUY REAL ESTATE INDEX PAGE