Jim IL, Phil Fernandez, JPiper, HELP with a deal - Posted by Scott SC

Re: HELP with a deal - Posted by Rick Vesole

Posted by Rick Vesole on November 17, 2000 at 23:05:22:

Piper is right, there is no deal here with the numbers you presented. However, I am not certian that there is no deal. We just bought a $52,000 2nd for $1,000. How you ask? We simply told the 2nd that the first was in foreclosure and that there was no equity and that unless they sold to us, they would get wiped out and get nothing. All of a sudden, they changed their tune and sold to us for $1,000. We have bought 2nds several times - for as cheap as $200 and as much as $2,000.

You should call the 2nd back and tell them no way, that you will either give them $1,000 for their 2nd or else they will be sucking air. If they don’t budge, go on to the next deal.

Re: The 10’ High Jump… - Posted by JPiper

Posted by JPiper on November 18, 2000 at 05:59:16:

Just a couple of calls huh? I really doubt this is the case. Funny how a couple of calls here and a couple of calls there and pretty soon you need a headset.

For example, why not start with lining up that nonseasoned refi? Granted Scott said he could get financing if he thought it was the right deal. But what he didn?t say was that he could get 0 down non-owner occupant financing?.or alternatively, nonseasoned refinance money. So how many calls do we make looking for this money? One? Or do we ?assume? the money is out there and make a bunch of calls? What about the local banker? You just going to call him? Or are you going to assume that this non-seasoned refi is something a little off the wall?.therefore requiring an appointment to explain the merits of your deal? Now you?re making a call to get an appointment, preparing for the appointment (I assume you would agree with preparation), attending the appointment, and later following up the appointment with more calls.

One call to that first mortgage lender? Don?t know about you but I usually end up playing the voice mail game?.following which the guy I reach is not the guy I need to talk to. But then, you?re just going to ?ask? if he?ll discount $10-$12K? This guy already has a feel for the market value of the property (if he?s the right guy). He knows the market is good. And he knows his position is a comfortable LTV. Unless you have a case to make (which I assume you do)?.what?s the result here? I generally try to make a logical case for discounting. That may take something more than a simple phone call. It may take pictures, something in writing, etc. Same thing applies to the second mortgage holder.

Now we?re not just talking about a couple of phone calls anymore?.now we?re talking about preparation, making a case, numerous calls, callbacks, etc etc. Time. Don?t get me wrong?I not against making an effort to do a deal. I would just like to have a belief system that I?m on the right side of things?..here I don?t see that.

What?s more, I could make ?a couple of calls? on several situations EVERY day just like this one. MOST of the foreclosures are encumbered in ways that IF those pesky lenders would just discount sufficiently then a deal would be possible. And IF you could do non-seasoned refi?s financing these numerous deals would never be an issue.

Rather, I think working deals like this one are low probability deals. I think you could chew your time up trying to do these on any kind of a consistent basis.

Now change a few things in the mix here and my opinion changes. For example, tell me this house is in trouble?it needs various repair such that you?ve eliminated the retail market. NOW I get a little more interested. Tell me you have access to cash to take this deal down?.that you?re not goofing around with a non-seasoned refi. Now tell me that first mortgage is a little smaller, and the second mortgage is a little bigger?.now I might start to get excited.

Until then, I have better prospective deals to work on. I think it becomes a case of priorities. I suppose if you have nothing else to do, it doesn?t hurt to give this a shot?.might learn a few things. On the other hand, if you have plenty of things to do then why spend time on a low probability shot?

JPiper

Re: Jim Did I Ever Tell You I could Jump That. - Posted by JPiper

Posted by JPiper on November 18, 2000 at 06:20:30:

Phil:

I know you can high jump 10 feet. You told me in the bar in Atlanta. Funny thing is…I believed you. Of course I’d had a few beers. LOL.

As I mentioned to JohnBoy above, of the possible deals out there this is the one I’d put somewhere down the list…for when I didn’t have much else to do. I’m not saying this deal can’t happen…it’s always possible if the stars line up just right. But then again, you could say that regarding just about any deal.

Personally, I think this deal is going to take enough time to work with a low chance of success that I would prefer to just keep looking.

JPiper

No recording? - Posted by Augie (So. CA)

Posted by Augie (So. CA) on November 18, 2000 at 13:52:49:

How do we ensure that the seller is not signing another deed with another buyer? Afterall, if the other buyer checked the County Recorder’s office, he/she would have no knowledge of the first deed.

Augie

Is Authorization Needed to Negotiate? - Posted by Marbs

Posted by Marbs on November 17, 2000 at 12:16:04:

Hi John Boy,

As usual, you’re thinking outside the box. Nice work.

A quick question. Would the current owner have to authorize the holder of the first mortgage to negotiate with Scott in the way you’ve suggested, or may the lender do so without the owner/mortgagor’s permission? If authorization is needed, how is that obtained?

Well, OK, make it two quick questions … LOL. Is it common for a lender to discount a mortgage payoff in this type of situation? If anyone has experience in this type of negotiation, I’d love to learn how you go about it. Thanks in advance for all responses.

Dave

Re: HELP with a deal - Posted by JPiper

Posted by JPiper on November 18, 2000 at 06:31:02:

I agree Rick. In this case, the second is in essence trying to get full market value out of this property minus the real estate commission…way too high. My guess is they’ll take less if they have an ounce of sense…and if they happen to take $1K then this deal changes completely.

JPiper

Re: No recording? - Posted by chris

Posted by chris on November 18, 2000 at 22:25:58:

Affadavit and Memorandum of agreement gets recorded.

Re: Is Authorization Needed to Negotiate? - Posted by phil fernandez

Posted by phil fernandez on November 17, 2000 at 13:06:14:

Every deal and every bank is different when it comes to either discounting delinquent mortgages or getting a bank to give you a new mortgage to a qualified buyer to pay off the delinquient existing mortgage.

I did a deal this past summer where the mortgage balance was $43,000 with about $8,000 in back mortgage payments. The foreclosure process was well under way and the redemption period was to expire in about two months. How did I know all of that, hint ( I went down to my courthouse and got the info.)

I knew the house was worth $70,000 so there was a nice chunk of equity involved that I wanted. I approached the bank, a small local bank that keeps most of their mortgages in portfolio and made them an offer of $35,000 and they could stop the foreclosure right then and there. But they couldn’t do that, but did say that if I bought the property from the defaulting owner for the $43,000 they would waive the $8,000 in back payments.

I said ok but only if you lend me the entire $43,000 at 8% interest at a fixed rate for 30 years with no balloon. The bank says no problem. So we closed and I got the equity.

Point of the story is if I didn’t ask the bank, I never would have 1./ acquired the house and 2./ never would have gotten the 100% financing. You gotta ask the bank. If they have a problem that you can solve you might have a deal.

Re: Is Authorization Needed to Negotiate? - Posted by JohnBoy

Posted by JohnBoy on November 17, 2000 at 12:42:37:

You brought up a good point! YES, you need authorization from the seller to discuss any information pertaining to the loan. When you get the deed or if you’re going to wait on getting the deed first, you need to get an authorization form signed by the seller who is on the loan and fax a copy to the lender before they will discuss any information about the loan with you. I know Bronchick has this form in his course, but you might check his web site and see if he has one their to download.

Re: HELP with a deal - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on November 18, 2000 at 14:14:02:

And the closer it gets to the date of the (trustee/sheriff/foreclosure) sale, the more motivated the second lienholder may become.

Just wanted to add my 2¢.

Best of Success!!

Jim Kennedy,
Houston, TX

Re: Is Authorization Needed to Negotiate? - Posted by Houserookie

Posted by Houserookie on November 19, 2000 at 20:02:33:

Thats’ assuming that you have qualified credit I
assume?

Austin