Funding a pre-foreclosure purchase 34 days from auction with no title work back yet

Written payoff is not a same-day item. Typical turnaround runs anywhere from three business days to two and a half weeks, and the servicer will not talk to the operator at all until the owner signs a third party authorization and the servicer accepts it, a form that gets lost roughly half the time. If that authorization is not signed today, 34 days is already tighter than it looks. And the arrears number from the owner is almost always low, because owners count missed payments and forget the attorney fees, the property inspections and the forced-placed insurance the servicer added.

Title's a solvable problem, sable. 87 percent of ARV on a 1978 house with a sight-unseen scope is the number I'd choke on. He's putting in zero dollars and asking you to carry purchase plus rehab, so the first 44k of softness in that ARV is yours, not his. I'd rather fund 258 for the buy and make him bring rehab money, even if he complains, because then he has something to lose when the roof turns out to be a 20k roof.

Naive question from the outside: if the owner has 40k of equity and the auction's a month out, why sell at 258 instead of listing at 320 and paying the arrears off at closing? Is it that a normal listing can't close inside 34 days, or is there something about the house that keeps a retail buyer's lender out? The answer changes how motivated the owner really is, and whether that price survives the first person who tells him what the house is worth.

Ran his exit and I don't love it. 340 resale, take 6 percent for agent and seller costs, that's 319.6. Pay you 296 and he's at 23.6. Five months of interest at 11 percent on 296 is about 13.6, and 2 points is 5.9. He's got roughly 4,100 left before holding costs, taxes, insurance and whatever the repair number really is. He isn't asking you to fund a 44k profit. He's asking you to fund a coin flip he can't lose money on because none of it is his.

"Roof and one bathroom" on a 1978 house isn't a scope, it's a hope. Full tear-off on a 1,450 foot single story runs 14 to 18 in most markets, so a 38 budget is really a roof plus 20 for everything else. On that vintage, eyes belong on the supply lines, the panel, and whether the sewer lateral is clay. If the answer to any of those is bad, that's another 8 to 12 with no contingency built in. A line item bid from someone who has actually walked the property is worth asking for, since a 4,100 cushion goes negative fast.

Worth asking what the rental fallback looks like, since a 6 month interest only note on a flip with no cushion usually turns into a refinance request in month five. A 1,450 foot house at that value band rents in a range that won't service 296 of debt at anything close to 11, so there's no rent-it-out plan B here, only a price cut. Flint's version where he brings the rehab money at least gives him a reason to answer the phone in month five.