Are you planning to buy a home at auction with your relative standing there with you? It is not that simple. You cannot just target a home that you want and expect it to go to auction and be well priced. It is more likely that the property that you want will be postponed until a future date. It is even more likely, that the starting bid will be more then the fair market value. Only a hand full of homes per day out of hundreds is offered at a discount. You will have to target many homes and go many times in order to get a good deal. You will also have to make sure that you are buying a first lien and not get stuck with a second, unless there is still equity after covering the first. You will also have to make sure that there are no IRS liens attached to that house. You will also have to pay for any unpaid property taxes. Does your relative understand all the risk that is involved in these transactions? If you buy the home under your name, you can take a cash out refi for 70% of the current appraised value. Therefore, if the property does not appraise for 30% above what you paid plus any unpaid liens/taxes you will not be able to pay/refund the relative in full with the loan. I believe you can have your relative buy the home under their name and quit claim it to you or sell it to you under contract and just go straight to escrow. I have noticed a lot of interest in trustee’s sales recently on piggs from people that do not have their own cash and do not fully understand the risk involved. It is very risky to do it with you own money and even more risky to use borrowed money. If anyone is attempting to do this under borrowed money, I would make sure that you keep some cash reserves to deal with any unexpected expenditures. These homes may be discounted for a reason and some may be move in ready, but you will never know for sure until you buy one.
