Re: Help with this deal please. - Posted by Rick W.
Posted by Rick W. on February 21, 2000 at 05:56:06:
One of the books that helped me with pre-foreclosures is “Goldmining in Foreclosure Properties” by George Achenbach, along with the Ted Thomas book already mentioned.
Pre-foreclosures are one of my favorite ways to buy a property. Not only do you have a VERY motivated seller in most circumstances, but the optimization of your capital is the greatest. By that, I mean that instead of having to come up with the total amount of cash to buy the property, satisfy the mortgage, plus repair costs, you can get away with only the arrearages and repairs, and leave the existing loan in place.
When you take over this mortgage “Subject To” the existing financing, your personal liability is minized as well, so your risks are in only the deal, not your personal credit being affected.
This deal, requiring $8,300 up front to realize a possible return of over $40,000 (not to mention the fact you can mark up the selling price +/- 10% due to the ability to sell it to someone who cannot qualify for a conventional mortgage), is a great opportunity.
If you don’t have the capital to put up for the back payments, look to a private lender/partner/credit card to get the money, but HURRY. Like in baseball, you can’t steal secon base in slow motion, and you can’t wait to analyze this one to death. Get it under contract with a minimal binder, then proceed with your due diligence.