An Amazing Foreclosure Story

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Jim Keglovich( my fiance) and I; Tammy Phelps from Mount Airy, MD just settled on our 1st foreclosure under our brand new LLC (JT Investment Properties).

We received a phone call on Nov. 1, 2005 that a man needed our help. We went to visit him at his home that night.

Divorced one year ago, he moved out so his ex-wife and 2 children could stay in the home, as long as she made the house payments which was in his name only.
On Oct.30, 2005 his ex-wife dropped the 2 girls off at his work, said she was moving to California, did not want the girls anymore and “Oh by the way, the house is in foreclosure!”

He moved back to the property and we began the process of purchasing his home and paying off his mortgage which was due to be auctioned Nov. 6, 2005. Yes, we had 5 days to accomplish this.

I called my private money source to find out she was not able to help. I panicked in a really big way because I told this man not to worry, we were here to help. I called another money source and we were able to make this happen.

However, this Dad did not know where they were going to live, or what they were going to do, and his girls were terrified they were going to be out on the street.

Other investors said they would stop the foreclosure, provide NO EQUITY, and they must be out on the 5th, that's it. I am a Realtor and I began doing my homework, pulling comps, title searches, cost of repairs, etc., and to top it off we incorporated our business on Nov.3, 2005.

I realized this single dad had equity in his property so we offered to pay him his deserving share. He could not believe we were real. I stopped the foreclosure on Nov. 5, 2005, one day prior to the aution with a certified check in the amount of his payoff, which now had accured attorneys fees, late fees, etc., not to mention it was 7 months behind in mortgage payments.

I found a single family home with a fenced-in yard the next day that was perfect for them, only one problem, how do you buy a home when your credit is ruined? Because he was willing to purchase the home “as-is” and could put down 10% down with the equity we gave him the sellers agreed to sell it to him with “OWNER FINANCING” and his payments are only $100.00 more a month than what he was paying to rent.

On Nov. 6, 2005 at 10:00 a.m. we went to settlement to purchase his property from him, at 6:00 p.m. he and I went to settlement on his new home. On Nov. 6 he was able to sell his home in foreclosure, purchase a new home, pay off debt that was ruining his credit even further, and walk out of settlement with 5,000.00 in his pocket.

When we got out to the parking lot he turned around, with tears in his eyes, hugged me tight and thanked us for coming into his life, saving his house, and providing an opportunity for he and his girls to have a fresh start together in their new home. He handed me a picture that the girls had colored that brought tears to my eyes.

Yes, we are proud to be investors and enjoy the profits we earn, but nothing compares ever to this amazing story that truly defines why we do what we do and who we are. Investors always get a bad rap, “Aren't you the kind of people who take advantage of other people in unfortunate situations?”

I know not every situation works out like this, but when it does and the stars align it makes me realize that all of the deals that are tough, this very one story makes up for all the others.

Here are the numbers.

ARV: $240,000.00
Repairs: $20,000.00
Payoff: $81,000.00
Equity to seller: $ 35,000.00

This will be our 1st buy, rehab, and hold long term as a rental with rental income at $1,400.00 monthly.

Thank you for the opportunity to share our story with others.
See, there really are people out there who can still make a profit and help someone in the end. Many unscrupulous investors have ruined it for the investors who do it the “RIGHT WAY”. We can go to sleep at night with a clear concious. Thank you.

Jim Keglovich and Tammy Phelps
JT Investment Properties LLC

Tammy Phelps
Frederick, MD

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An Amazing Foreclosure Story

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