Posted by Irwin on November 04, 1998 at 06:03:09:
Step 1 - Ascertain FMV. Remember. The key to making money is BLSH - Buy low/sell high. If there is no equity, or if you don’t see any way to create some, skip Steps 2 amd 3, and go to step 4.
Step 2 - Get control. That is, get agreement from owner on buying the equity.
Step 3 - Deal with the mortgage lienholder(s), their attorneys etc… to cure the default.
Step 4 - Go to the next deal.
$167,000 FORECLOSURE/NEED HELP - Posted by GREEKVESTOR
Posted by GREEKVESTOR on November 03, 1998 at 16:58:39:
A few weeks ago I found a nearby house foreclosure for $167,000. I t was listed in the foreclosure magazine which I’m a subscriber.
I visited the subject and spoke twice to the owners wife. I showed her my interest in buying the property and thus helping them save their credit rating.
My problem is that I’ve never bought this way and do not know the best way to proceed. I want to move fast. I’ve invited the owner to my office to discuss the property.
I need a full-proof plan, that will help me buy this house quickly and efficiently, with the smallest down payment possible.
It’s a 2FAM, 25x100 lot, wood frame with aluminum siding, with a 2BED/1BATH on the 2nd floor, and a 2BED/1BATH on the 1st floor, and a finished semibasement apartment.
Legal rent rolls: 1st…$750/month
2nd…$775/month
Other rent rolls: BAS…$700/Month
Total monthly rent rolls…$2,225
Initially, from what I’ve seen so far, I will need to spend about $5,000 on the house to refurbish it and make it rentable.
MY IMMEDIATE PROBLEM RIGHT NOW IS TO HOW TO PROCEED!
Re: $167,000 FORECLOSURE/NEED HELP - Posted by Irwin
Posted by Irwin on November 03, 1998 at 19:43:20:
Just a couple of quetions that you need to get answers for:
What is the quick sale fmv of the property?
What is the fmv if rehabbed and held for resale?
Are you in a judicial or power of sale state? How much time do you have before a f/c sale takes place?
What is the pre and post sale redemption procedure in your state.
Is pre-sale reinstatement possible? How much is needed? What will the principal balance of the first mortgage be after it’s brought current?
Will the owner quit-claim his interest to you? If not, how much will it cost to buy the deed?
Are their any liens against the property beside the first mortgage? Are any of them foreclosing? Foreclosed?
The least expensive way to buy a foreclosure is to catch up the back payments, fees and f/c costs. (Reinstatement)Then take over the remaining balance of the mortgage. With this size debt, don’t be too surprised if reinstatement requires $10-20,000.
Re: $167,000 FORECLOSURE/NEED HELP - Posted by Harvey Carroll, Jr.
Posted by Harvey Carroll, Jr. on November 03, 1998 at 18:24:32:
Forclosures are a bit tricky. From studies there are (2) things to keep in mind. 1) Equity Redemption a period in short where the sellers or defaulters can make things right. 2) Statutory Redemption, a one year period after the masters commissioners sale where the sellers can simply come up with the price you paid and 10% and regain possession if you do not pay at least 2/3rds of the appraised value of the property. I am no expert and have no formal experienc; however, I would not put $5,000 in it if I may loose it within a year… Personally, I would simply try and assume their loan and get them to carry a second mortgage. This would satisfy the bank and they could get a small note from you that is good as a bank bond and certainly better that investing in the stock market these days. If you give them a bit down this would help with relocation cost… My concernes are the true cashflows((((will it really pay the principal, interest, taxes and insurance, and if it does why can’t they maintain the properties payment.
Re: $167,000 FORECLOSURE/NEED HELP - Posted by GREEKVESTOR
Posted by GREEKVESTOR on November 03, 1998 at 22:40:35:
Thank you guys for your most constructive comments!
I honestly appreciate your time and effort. Wish you the best of luck in your “no money down” endeavors.
Do you have a step-by-step plan?