Hello Everyone,

My first possible deal. Need some advice on how-to or even if-to proceed with this deal. It’s a preforeclosure deal with a seller that owns 2-houses which are both in preforeclosure. I’m meeting with the seller to sign the contracts tomorrow and the #'s are. By the way both houses dont need any repairs.

1st House: 3-Family
Recent Appraisal - $270,000.
1st Mortgage Balance - $208,000.
2nd Mortgage Balance - $26,000.
Behind 7-Months

2nd House: 1-Family Cape
Recent Appraisal - $170,000.
1st Mortgage Balance - $118,000.
2nd Mortgage Balance - $29,600.
Behind 7-Months

My first plan was to get it under contract and try to negotiate with the 2nd mortgage companies to accept a substantial discount and start at 10% of the balance. If accepted I would then record the deed and transfer title to my name. Then I would start marketing the houses. I did my own title searches on both properties and there was only 1-water lien of $175. no biggie, everything else cleared out fine. The appreciation here in this city has been a steadily 15% for the last 5-years.


I wouldn’t trust an appraisal. I’m trying to buy a house right now that had a “recent appraisal” of $244k. Comparables for the same property came in at about $210k. Make sure you know what the house will sell for, not the opinion of an appraiser…

You want to know WHY the appraisal was done. If it was for a refinance, then it’s likely an inflated opinion of FMV. When banks want to lend, they like those appraisals to come in as high as possible.

What specific questions are you trying to get answered?


Oh how true, we always like our appraisals to come in on the high side-especially for refi’s! I suggest you look into what the actual FMV is, not a typically inflated appraisal as Raj mentioned. And make sure you also get some comps for that area as well.

Thanks for the responses. I have a realtor buddy who I will ask for comps tomorrow.

i AM not sure if you would like me to but, I have access to what some appraisors/agents use for online comps. All I need is the address. If not it is cool.

Aside from getting a discount from the 2nd, I’d try to get a discount from the 1st as well. Who are the lenders?

How did the seller find you?