PRE-Foreclosures?

[investinAK]

As you can tell I have had a lot of questions on foreclosure properties, mainly because I tried a free trial from realtytrac.com and have found many properties and it has caught my attention...Anyways, my next question is...When a property is in "pre-foreclosure" is this still a period in which I am in a position to offer the owner what he owes plus a little "uhaul" money to make for a fast sale at a big discount? then turn around and flip the property? What if the seller is say $4000 behind in payments, and is in preforeclosure, could I sub2 the property, then turn around and lease-option or owner finance it for say $10,000 and make up the back payments? I am very intrigued by this area of investing!! :)

[REIaddicted]

As you can tell I have had a lot of questions on foreclosure properties, mainly because I tried a free trial from realtytrac.com and have found many properties and it has caught my attention...Anyways, my next question is...When a property is in "pre-foreclosure" is this still a period in which I am in a position to offer the owner what he owes plus a little "uhaul" money to make for a fast sale at a big discount? then turn around and flip the property? What if the seller is say $4000 behind in payments, and is in preforeclosure, could I sub2 the property, then turn around and lease-option or owner finance it for say $10,000 and make up the back payments? I am very intrigued by this area of investing!! :)

Ryan,
yes, you can still buy the property in preforclosure. Absolutly pay the back and give uhaul $.
There are many creative ways to then " take care of the property" you can do as you mentioned lease/op , have a qualified buyer ready and do a double closing.

all sub 2 in it's most basic form is the owner keeps the morgage in his name.
Links on sub 2
http://www.magicbullets.com/forum/showthread.php?t=371&highlight=subject

http://www.magicbullets.com/forum/showthread.php?t=147&highlight=subject

http://www.magicbullets.com/forum/showthread.php?t=193&highlight=subject

http://www.magicbullets.com/forum/showthread.php?t=360&highlight=challenge

http://www.magicbullets.com/reiclub.php
ubject To (Sub2) - (9)
Advanced Subject To Investing
Anatomy of a Sub2 Purchase
Find All the Subject-To Deals You Can Handle!
Frequently Asked Questions About Sub2
How to Overcome the Seller's Objections When Buying Subject-To
North Carolina Real Estate Commission Answers
Subject To Investing for the Beginner
They Told Me I Wouldn�t Need Cash When Buying Subject-To!
Yes, the Seller Can Get a New Loan

[investinAK]

thanks Lisa! Fortunately Sub2 is one of the areas I feel I have "SOMEWHAT" of a grasp on...I have read all of William Tingle's articles on sub2deals.com...I even saved them onto a cd so that I could read them on my laptop when away from home! :) this is so exciting! I have found MANY preforeclosures in my "prescribed" areas, and will soon be contacting some of them!! :)

[Just Information]

If you are planing to use the sub 2 investing strategy you really need a course on the subject - Articles alone will not get you through this as you need details - Since you like William Tingle's articles you should take his course.

Look you can not even get to first base until you make the deal based upon your customers needs, it's not as simple as just offering uhaul money.

You can chase after all kinds of great deals but if you do not have buyers lined up you will fail yourself and your customer.

In a preforeclosure, you will normally have two to four weeks before the property is foreclosed on! Time is not on your side in most cases.

You can lease-option or owner finance in a sub 2 transaction but before you jump you should line up some buyers.

[investinAK]

I was just using "uhaul" money as an example...I don't intend to buy anything without buyers lined up, and certainly without knowing their needs. My main question was just the fact that preforeclosures are actually still able to be purchased.

[Just Information]

I was just using "uhaul" money as an example...I don't intend to buy anything without buyers lined up, and certainly without knowing their needs. My main question was just the fact that preforeclosures are actually still able to be purchased.

That my friend is a strange question. Yes preforeclosures can still be purchased based upon a customer willing to sell and your ability to follow through with the purchase terms.

[investinAK]

That my friend is a strange question. Yes preforeclosures can still be purchased based upon a customer willing to sell and your ability to follow through with the purchase terms.


Sorry John Micheal, I did not mean to ask that question in a strange manner, I simply did not know the foreclosure process, and wasn't sure about when the property is in "pre-foreclosure" if you would go throught the same P&S agreement, or if you would have to go through the lender, such as in a short sale, or what...I haven't ever really heard or read anything on foreclosures until the last few days, and the possibility of profits and problem solving in this field intrigued me! Anyways, thanks for your critiques and advice! I appreciate them!

[friendlyhomebuyer]

Ok so how would you guys reccommend lining up potential buyers? I mean if your just starting out and you don't any properties lined up??? I've heard of calling and paying mortgage brokers some kind of a small fee for a list of buyers they were not able to approve due to certain circumstances. Are there other ways?? :biggrin:

[M Aron]

There are posts in the "selling your own home" forum with techniques and lists for obtaining buyers.

http://magicbullets.com/forum/showthread.php?t=395

http://magicbullets.com/forum/showthread.php?t=387

Hope that helps.

Mathew

[investinAK]

Ok so how would you guys reccommend lining up potential buyers? I mean if your just starting out and you don't any properties lined up??? I've heard of calling and paying mortgage brokers some kind of a small fee for a list of buyers they were not able to approve due to certain circumstances. Are there other ways?? :biggrin:

I am getting ready to put an ad in the paper...

"Make $20,000 by buying my house! Worth $255,750 Sell for $235,750! 4/2, 2 car garage, 1 acre MUST SELL 907-555-9976 " (something like that anyways)
(Enough equity to entice a retail buyer, not enough for investors)

After I start to get calls, I will tell them it has been sold, get their information, and what they are looking for, price range, area, etc....Then when I get a home under contract, call up any number of "wanters" on my list, and offer it to them for a tidy profit. I hope this works! Only time will tell!

[Dan Auito]

I don't recommend false advertising Ryan. I would recommend what your thinking once I had atleast one home to offer under a real offer scenario, One short sale course to get is Randy Lee's at www.purpose.4t.com It's a worthwhile investment for your toolchest of buying techniques.

As john Michael mentioned you'll need some serious how to info to do some of these creative deals and that entails the contracts and scripts to get those deals understood, accepted and to the closing table.

Keep stroking, your learning more than most! :wink:

P.S. ALSO KEEP YOUR EYES OPEN FOR A CREATIVE LONGTERM INVESTOR IN YOUR LOCAL AREA, THEY WILL HAVE MANY OF THE LOCAL DOCUMENTS YOU NEED TO GET DEALS DONE!

[investinAK]

I have to agree, when I read that in my book (or another forum?), I wondered if it was ethical or not. I have heard many contradicting theories about it, however, I did post a thread (not sure if it was here or not...?) and asked if this was legitimate way of getting buyers and had a positive response. If you don't think I should do it, I probably will not...just an idea I got from another investor.

[Just Information]

Ryan my friend you are just going in the wrong direction.

I just can not stand it any more - you have the drive and that I like.

I also like that you are checking with other investors before you jump.

Dam you got to my heart - email me I have two books that will get you up and running - My gift to you - just remember to return the favor to another my friend.

The two books are my most popular and you can download them at no cost my friend.

Talk to you soon.

[Dan Auito]

Think about this Ian, if you actually have a property to Sell, L/O, how much more enthusiastic do you think you would be.

Your enthusiasm will help you get deals done and it will build your reputation as a fairdealing fellow when you can deliver on your promises, so keep ethics in mind and you'll have a great career and much more success that you can be proud of along the way.

I always check myself with this question as the last check and balance if I'm on the fence as to whether or not to do something.

What would happen or how would I feel if I got caught? If your answer to yourself comes back as I would feel great then go for it because you will be doing great things, if you slink away from the answer and start to make excuses for it then you can now begin to try another approach.

Provide valuable service and people will help you make your fortune! :praise:

[investinAK]

Ryan my friend you are just going in the wrong direction.


Hey John Micheal! Could you please elaborate on how I am heading in the wrong direction? I really appreciate it! Expect my email any moment! Thanks!! :)

[Just Information]

Hey John Micheal! Could you please elaborate on how I am heading in the wrong direction? I really appreciate it! Expect my email any moment! Thanks!! :)

With my two books and my personal coaching my friend I'm going to get you going the correct direction - after you study my two guides you need to set up a telephone coaching time so that I may get you into helping others and making some money in the process - You will owe me a cold one after your first 50k DEAL?

[investinAK]

With my two books and my personal coaching my friend I'm going to get you going the correct direction - after you study my two guides you need to set up a telephone coaching time so that I may get you into helping others and making some money in the process - You will owe me a cold one after your first 50k DEAL?


SOUNDS GREAT!! Only one problem...I don't turn 21 until October! Maybe I am too ambitious...?!

[Just Information]

That's not a problem - I will make you a success my friend it you do your part!

No money who cares - with real estate this will not be an issue but only to you!

Young, who cares - you just get to retire earlier than the rest of us.

I will coach and guide you and you do all the work! It's a WIN-WIN my friend.

Just do not forget the rules - honest transactions - All deals a WIN-WIN.

How are we going to do this?

WIN - WIN deals

OPT - Using other peoples time

OPM - Using other peoples money

WIFFY - Teaching you "What's in it for you"

WIFFM - Teaching your customers " What's in it for me"(them)

Using my "WOW" strategy will get you to 500k or more in 5 years or less my friend.

You will have no excuses my friend with me behind you - So let's get it on!

I'm going to make you may poster child! Fair enough!

[investinAK]

Sounds like a plan to me!! WOW 500K in under 5 years? Sure beats the $50k my stepdad said I could be making! :) I am ready to learn the ways of the force Obi-Wan!

[friendlyhomebuyer]

I was just going to post "good idea ryan" about the newspaper ads. But I guess that would be unethical now that I think about it. I wish there were people like you (my same age) that lived around here that were interested in real estate. I went to a real estate investment meeting when I was in Arizona and the people there...happened to all be 30 years older than me were so unhelpful, basically I sat there and listened to them talk about things that were so far over my head and when I asked a question I was given an answer that was even further over my head. Good to know there are people my same age going for the same thing...and people like John Michael and Dan willing to help us :-) :praise:

Jamie

[investinAK]

Hi Jamie! I hear you! It is definitely relieving to know that there are others out there around the same age as us! It is great to have sites like this, where they take you seriously even if you are only 20 years old! I went to a seminar a few months ago, and everybody there was in their 30s and 40s!! Where exactly do you live? Thanks for the post!

Ryan

[M Aron]

I agree with you both. I just turned 18 this month! I went to a RE seminar and saw nothing but gray hairs (no offense):SM104:. It is nice to hear of people my same age interested in real estate. I thought I was the only one! :smiley5:

On the other hand, I appreciate the shared experiences and knowledge of longtime RE investors. :praise: Their wisdom will guide me to success! :pa:

[friendlyhomebuyer]

Hello Ryan,
I am currently living in Paris Texas, but it changes every 3-6 months. My partner is a traveling CFA so we travel alot. Good to hear there are more young guns here. Its awesome that the ones that have been in this business for years on this site are willing to help us get our starts and teach us the ropes. Keep it up guys :praise: :thumbsup: :SM107:

Jamie

[Dan Auito]

I know this thread started out as pre-foreclosure but let's just say you missed that event and now need to find out which bank has this property back on its books. Here is a neat little service which realtytrac has just come out with.

It doesn't cost you anything to look after you sign up but it will probably cost something to get in touch when you see properties of interest, that is unless of course you want to try and track the lender down yourself. Ok, enough said, check this link and do the sign up thing to get your look in your neighborhood. http://www.bankhomesdirect.com/BHD/join3.asp

[investinAK]

Thanks for that site Dan!! Another to add to my ever-growing favorite folder!! :)

[kimesha]

cool site Dan, wat better than realtytrac. they actually give adresses and pictures. And to the youngsters, I WISH i had been thinking like you are now when i was 18. i was too busy... well i'd rather not say what i was doing. anyhow I'm ready now at 28 (which isn't too bad). you guys % gals inspire me even more. :praise:

[Dan Auito]

Since you have all been so dedicated to this thread and read it this far, I guess it's time to give you a couple more resources. We all know how much we like those!

Go surf and bring your catch back home, by the way, home is here if you didn't know that. :SM120:

Foreclosure bulletin board: http://www.foreclosureforum.com/mb/index.html
Another board for you: http://www.therealestatelibrary.com/wwwboard/wwwboard.html
Foreclosure glossary: http://www.foreclosureforum.com/glossary.html
www.foreclosurelms.com. They are teamed up with www.homeownersaa.org also.
Florida foreclosure lists: http://www.foreclosuresdaily.com
Final links set: http://www.therealestatelibrary.com/rer.html

[REIaddicted]

Thanks Dan,

I have added them to my favorite folder under resources. I am getting so many, I am going to have to start placing sub catagories to keep track! :SM038:

I love it, one can NEVER have to many research or resource links. :wink:

Lisa

[friendlyhomebuyer]

:SM050: Awesome links Dan thank you :SM144:

[BCC]

I'm not sure where Katy, TX is but if its near Houston your letter will likely be one of 100+ letters. Don't let that discourage you though. One guy called me one day and said I got a bunch of letters today and yours just happened to be on top so I called you. Luck of the draw. Some get their letters opened just by the volume of mail they send out and some use lumpy mail or hand addressed mail to stand out.

As far as the tax benefits on a sub 2, I'm sure the veterans will have more insight but I'm told that if you can prove ownership with a deed and show that you've been making payments that's enough for your accountant to insure you receive the tax benefits.

Bernard

[Invstr73]

doing mortgage pre-foreclosures is one with the highest amount of competition? I've heard that the letters I just sent will be competing with upwards of 20 other letters

It's true, in my area anywhere from 20-40+letters will be reaching the homeowner daily! The competition is VERY fierce. Everyone from attorneys wanting them to file a Bankruptcy to Brokers trying to persuade them to refinance.

[Invstr73]

Since the mortgage company on a subject 2 deal doesn't know of the deed transfer they are sending all of the tax documents to the person whose name the mortgage

You can put in a change of address and send it to your PO Box, if you are the "new" owner. I don't think the servicing company will care where they send it as long as they get paid.

[Invstr73]

seems like the red flags at the IRS would surely pop up if you were trying to claim something based on another persons name and SSN.

I'm unclear why they would care? You see, you aren't misrepresenting who you are, you are making payments on behalf of the owner. The homeowner put in a change of address but the mortgage is being paid, what's the issue?

You also have the deed. You are the one who is making the payments, (which are current) you will also have cancelled checks to prove it. What would be the red flag?

Unless somehow the IRS would go through all the the time and effort to contact the lender and force them to expedite the Due on Sale Clause. I'm no expert and still learning all I can, so if anyone has heard of that occuring or I have this incorrect, please let me know.

[Jnazareno]

It's true, in my area anywhere from 20-40+letters will be reaching the homeowner daily! The competition is VERY fierce. Everyone from attorneys wanting them to file a Bankruptcy to Brokers trying to persuade them to refinance.

same here in California..

[ajr]

It is so great to see Dan and JohnMichael King of Bling helping people out along with others on this forum. It always makes me jealous that others can pull at the heart strings and get free ebooks, forms etc. You guys are great at this but I haven't figured out how to pull the heart strings like others. I am trying to get into real estate investing also. I have no money, broke, no assets so to speak and not a lot of debt but I keep reading and plugging away and wanting to do sub2 and L/O investing but have to keep reading and getting what I can from this great site til I think I have the knowledge to jump off the fence I am sitting on. they say it can be done with no money but I haven't seen a good plan yet LOL Well keep up the good work you guys as we all learn from you.

[lando201]

I just pass my Real estate exam here in California, I very interested Preforeclose but not sure where to start. I figure that I would read the stories of other and seach for educational infomation, before i leap. Any advice.

[Jnazareno]

Congrats on passing the exam...this Forum is great for learning many things..

[alb047]

I am investor looking for a partner to set up small company to invest in foreclosure, probate REOS basically small officce shares expensives and work
together in our free time or few hours a week researching finding deals making offers etc please serious inquires only we need at least 5k each to start.

[investorbennett]

alb047- What area are you looking for an investor partner?