Pre-foreclosure - Posted by Dianna

import · February 19, 2002, 10:25pm

Posted by Dave f on February 19, 2002 at 23:57:19:

Is the property vacant? This is the key. If it is then get it under contract at a price that you would be willing to buy it if you had to (large enough spread). If it is occupied by the owner it will be very difficult to re-sell with them in there. Consider buying it subject to the existing mort. If you would not be interested in buying it unless you can get a discount, then I would consider moving on.
Short-sales on a first mortgage are becoming more and more rare – and there will usually be a realtor involved ruining the deal. You may however, get a second mortgage holder to take a discount, but keep in mind that there will be a lot of work involved – so make sure it is worth your while.

import · February 19, 2002, 10:25pm

Posted by Dianna on February 19, 2002 at 23:25:35:

Hello,

I have found a property in foreclosure. The sale date is in May 2002. It’s vacant and the owner is willing to talk to me. My problem is that I have only bought at the auction (and it’s too competitive and locks up too much money), and I want to be clear on my preforeclosure options. Regarding this property, I am interested in possibly doing an option or possibly a short sale.

I would like to take control of the property by having the owner sell me an option, and then getting the bank to agree to provide a discounted price, and then sell it on the open market for a discount.

If the owner offers me the right to place an option to sell her property, how does that work? What paperwork is involved? Do I get the paperwork drawn up w/owner and then approach the trustee or the bank? Do I need an attorney…

Help…

Helpless in Seattle (Dianna)

import · February 20, 2002, 4:01am

Re: Pre-foreclosure - Posted by JoeKaiser

Posted by JoeKaiser on February 20, 2002 at 05:01:07:

Dianna,

Good thinking, but it’s a bit more complicated than you seem to imagine. Still, it’s worth poking around a bit.

Your first move is to tie it up with a purchase agreement, contingent on your successful negotiation of a discounted payoff. No discount, no obligation on your part.

Contact the lender (not the trustee . . . he’s only there to shuffle the paperwork) with your proposal. Make it compelling (nasty foto’s are helpful . . . let me know if you need some, I’ve got plenty ;-).

Include fixup estimates using brutally honest figures.

Package all that with your proposal. The proposal should include a “drop dead,” date (a date after which no deal can be made) to get them to move quickly (but don’t hold your breath).

Most importantly, it should be made clear that should they decide to “pass,” on your proposal, the only possible outcome is that they get the property back. You need to be absolutely sure that they understand that if they decline, they own that sucker, warts and all, and that between now and then, its condition can only get worse.

Some loans cannot be discounted. Some lenders have no incentive to do so, their losses being insured. You may have a great and reasonable plan that makes sense but for a number of reasons, cannot be accepted. In other words, you just never know.

Finally, “lease option” and “foreclosure” rarely go hand in hand. Buying foreclosures takes real money, and whenever real money is a factor, you’ll want a real deed for your troubles.

Joe

import · February 20, 2002, 12:04am

Maybe L/O it - Posted by investorrb WA

Posted by investorrb WA on February 20, 2002 at 01:04:27:

You could keep the sellers mortgage in place. If you were thinking of getting an option why not get a lease to and then sub lease option to a tenant buyer. Dianna give that some thought. You will have to take care of the back payments plus atty fees.

The very best of investing to you.

Investorrob WA

import · February 19, 2002, 11:51pm

Re: Pre-foreclosure - Posted by investorrob WA

Posted by investorrob WA on February 20, 2002 at 24:51:09:

Dianna I can see you’r a little excited and that is ok as long as we bring our self to look at some steps that need out attention on preforeclosures over a foreclosure at the county court house steps.

On a prefpreclosure you need to have information to make this the correct purchase. That information is

Is this a 1st., 2nd., or even a 3rd or 4th mortgage foreclosing.
Are there any leins on record Contractor, county or IRS. type.
Are there Epa or county code problems

Dianna what is needed is a title search.

Some years back 1993 in fact I was doing preforeclosures in King county. The Foreclosure atty had a title search done and would sell a copy for I think $25,00 to anyone that was thinking about bidding. Thats very cheap if you had one done would be about $250 $300. from your title co.

Your not bidding but you need this info because you don’t want to buy thinking there is only 1 mortgage and come to find out there are 3, or leins you don’t know about. Or other items that will cloud the title.

So call the Foreclosure atty office and get your copy. Then you will have the facts to know how to structure your deal with the seller.

Preforeclousers can be very profitable. The last one I did. I brought in 2 other investors on it. Had only a 1st of $24,000 a little over $4000 in back payments we made current. $20,000 in fix up and sold for $135,000.

Hope this helps in your case.

The very best of investing to you
investorrob