Pre-Foreclosure Flip Advice Needed...... - Posted by L.A.

Real Estate Investing
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Posted by L.A. on May 12, 1999 at 05:35:11:

Thanks John & Bill !

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Pre-Foreclosure Flip Advice Needed… - Posted by L.A.

Posted by L.A. on May 11, 1999 at 10:31:20:

I just got a “hot tip” from a loan officer who couldn’t help their client refinance their home.

I figure…I will tie the property up & then resell it on a land contract or lease option…I will need to collect enough to catch up the back payments plus penalties…which at this point is five months.

The monthly payment is only $490 per month for a 3/2 in a decent neighborhood…it’s a custom built house.

I have never done a “pre-forclosure” deal before…so ANY ADVICE…that ANYBODY will be willing to share with me…will be put to use…FAST !!!

Thanks in advance !

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Re: Pre-Foreclosure Flip Advice Needed… - Posted by John Bulik

Posted by John Bulik on May 11, 1999 at 21:10:25:

I agree with Bill. It pays to get all the right information regarding the sale date and all the costs regarding the property.
If the election and demand has been filed with the public trustee (assuming that’s how it is done in you area), then in addition to the back payments there are attorneys fees and trustee fees, for us the additional costs has been averaging $3k. That would put clean-up costs on the deal you are looking at roughly $5,500.
I also research the clerk and recorder for any other liens the owners forget to tell me about.
We do enough of these where our title company will give us title searches for free. I don’t trust these as we have had it happen more than once where they missed something that came back to bite us. A better bet is to get the title company to give a title commitment on the property in question (they will do it for nothing if you ask). This will also get you out of buying title insurance on the front end and the title work is paid for when you sell. Make sure you use the same title company when you sell.

John Bulik

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Re: Pre-Foreclosure Flip Advice Needed… - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on May 11, 1999 at 18:55:40:

L.A.,

I just closed on a pre-foreclosure myself. Three points of advice from my experience.

  1. Expect the seller to pay NOTHING. After all, they are in default and probably don’t have any money. So, you’re looking at all closing costs in addition to the reinstatement amount. What I thought would be $9,000 to get into this home cost me $13,000 by the time everything was said and done.

  2. Verify the date of the trustee sale. I was working towards the seller’s date of 4/15, but, in actuality, the date was 4/28. It worked out well for me, but I could imagine that it might also turn out the other way around if you don’t get confirmation.

  3. Maintain close contact with the seller. He/she will be immensely helpful in getting things done. After all, they are trying to keep a foreclosure off of their record.

I LOVE pre-foreclosures! I’m looking forward to the next one.

Best of luck to you. Let us know how it turns out.

Bill K. (AZ)