Posted by Bill K. - FL on April 26, 2000 at 07:45:42:
Greg,
I think you are oversimplifying this. First of all, using the above example of a pre-foreclosure you mentioned, have you checked for other outstanding liens on the property in additon to the mortgage in default? As you know, they will remain with the property. I would say fifty per-cent or more of these pre-foreclosures have them.
Secondly, someone has to bring the mortgage current so you need to know the exact figure necessary.
Third, you will have to find someone with that amount of cash available to buy if you don’t have the money or don’t want to pay yourself.
Fourth, when you say you are going to be able to sell higher than market value, how much higher do you think you can go? 5-10% maybe? What kind of condition is the house in?
So basically, your idea hinges on the proposition you can find a buyer with substantial cash available to buy a house for an inflated price in the time frame left before the foreclosure sale. Not necessarily an easy thing to pull off. In theory it can be done, in practice nothing is ever as simple as theory. Also, the seller might need some $ to go along which would add to the cash requirement. Plus you will need title insurance and have other buying costs. Do you expect these costs to also come from your buyer? Using the example you posted the total cash requirements could easily be in excess 10K. My experience with buyers for these priced properties is less than 10% have this kind of cash available.
I hope I have made you aware of some of the things you need to consider when dealing with these types of deals. Since there are some many of them around, I look for the ones with more equity involved. That way I don’t have to sell above market. I also try to get the deals before they have accumulated a large arrearage so the cash requirement is less. Good Luck.
Vacant House Owner 's Stupidity - Posted by Bill K. - FL
Posted by Bill K. - FL on April 24, 2000 at 19:10:15:
Just closed a deal last Friday and was on my way to settle a final bill with the water company when low and behold I came across two vacant houses sided-by-side. One had been thru a decent fire and the other was boarded all around. I contacted the owner of the boarded up house who lives in the next county. Told him I saw his boarded up house next to the one that had the real bad fire and was interested in working a deal to take it off his hands. I also made sure to tell him that no insurance company will pay off a claim on his vacant house so he had a real liability on his hands. His answer- Not interested!!!
Not interested? What was he interested in? Letting the house sit and rot. Waiting for it to catch fire, or have someone break in and get hurt? Anyway, after I got off the phone I printed up one of my vacant house flyers and stuck it in the mail to him. It was addressed to him and his wife. I hope she reads it first because it mentions the fire next door and their lack of insurance coverage.
Anyone else have any ideas on what to say to owners of vacant houses that don’t care about selling?
Bill,
Sometimes motivation just is not there, but time can change that.
How about taking a few extra moments out to do some sue diligence on the place, and then send the owner an offer?
He may just say "No, and yet again, he may just say, “Yes”. You never know until you ask.
And , if/when he says no, put the home into a “To do” file and followup later.
Sending this guy a flyer/letter/post card or offer every few weeks cannot hurt too much.
Just do not waste too much time on it.
I have found that when I do this, I get better responses back sometimes MONTHS later from these not so motivated sellers.
And sometimes I NEVER hear from them at all.
In fact, I found a home listed on the MLS as “Bank owned” just today. I knew the owner was in preforeclosure for some time and had sent them mailings for a while here. I even called and went to see them. (the home is two blocks from my own!)
They assumed the FC would just “Go away”.
NOT!
They never called me or wanted to deal with me.
Now I have no clue where they are living.
The home is vacant and my offer goes to the bank on this one tomorrow.
They were not stupid, just stuck, and shoulda called me.
Bet they still don’t think so though.
Some people just do not understand that a FC is REALLY BAD on your record, and that maybe I could have helped, and paid them in the process.
And who knows, maybe I’ll actually get the place cheaper from the bank.
Maybe address the letter only to his wife. Sometimes when one spouse finds out what the other spouse is doing (or not doing), they all of the sudden change their mind.
Re: Vacant House Owner 's Stupidity - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on April 24, 2000 at 21:21:49:
Bill,
As long as you think that the owner is stupid you will never be able to think like him (them). They have reasons for what they do. You do not know the reasons so you think that they are stupid, and this is just not so. You just don’t know the reason why. That does not make anyone stupid, except in your opinion which just might be a bit flawed.
The last one of these that I had was owned by a person who was born in that house and would not sell for any reason. It was his intention to own that house until he died. He is still living, and the house is still standing (boarded up). I do not agree with his thinking, and I will readily admit that I do not understand. I think I will drop him a postcard just to let him know I am still living too. Good luck…ED
maybe you can motivate them, are the taxes delinquent? is the town ready to condemn and seize? is there some outside force like a government agency that can add motivation. check it out do your homework and then get back in touch. If despite your best efforts they are still not motivated move on to another seller. You don’t need this particular seller.
hth
David
Re: Vacant House Owner 's Stupidity - Posted by GregNorman
Posted by GregNorman on April 25, 2000 at 12:10:30:
Jim,
I’m amazed how often I get the same response. A friend of a guy who does work for me called me yesterday about his home. He’s 6 months behind w/ the auction on May 11th and he’s dumbfounded b/c he can’t find someone to give him a loan on his property worth $95k, mortgaged to $90k. He wants to stay in the home so he wasn’t interested in what I had to offer… he just kept asking ‘Do you know anyone who will loan me some money?’. I was blunt and said ‘Would you loan someone some money if they were 6 months behind on payments?’ His answer ‘I see your point.’ But he still didn’t want me to take over his payments.
Re: Vacant House Owner 's Stupidity - Posted by Bill K. - FL
Posted by Bill K. - FL on April 25, 2000 at 18:39:31:
Greg,
You realize it’s not just taking over his payments but paying all his back payments, late fees, and paying off the attorney that is most likely involved at this point. You’re probably talking about coming up with 8K or more. What’s the point, on a house with that little equity?
Re: Vacant House Owner 's Stupidity - Posted by GregNorman
Posted by GregNorman on April 25, 2000 at 20:19:49:
Bill,
The amount in the post included all the arrears, fees, etc… it was the payoff amount for the mortgage. Even if it was overleveraged, I’d still do it. I’d make sure to tell him that I’m not going to be making a payment unless I find someone to purchase via contract for deed (CFD). I’d be able to sell higher than market value on a CFD and could make money on the spread in payments.