First lead!

Ok guys, I have my first lead!

Its listed with a realtor who I have just become friends with, who lead me to it.

Its in pre foreclosure, worth 311k, and he says he will accept anything to get out of it!

I havent done much research on preforeclosures, and I plan to wholesale it. Is it possible to wholesale through a realtor and a preforeclosure?

What other info do I need?

Thanks guys for any info you can give me!

Edit: He just told me it was built in 2004, so he doesnt have much equity. Is it possible to Sub 2 a listed preforeclosure?

Hmm Im not thinking so…dang…

First find out how much it will be to pay off the mortgage and the fees for defaulting. Then find out if there any liens on the property and factor them into your equation then try to get it under contract for however much equity it has in it plus a little more since you said there isn’t much. There are a lot of factor to deal with when your buying a pre foreclosure and even more when your going to wholesale it.

I’m not convinced there’s a deal here, and I’m even less convinced that you should take this on as a first project.

To answer your question, sure, someone can buy this house subject to, but the buyer will need to reinstate the loan (that is, bring all payments current and pay all fees in order to stop the auction). If the loans total over $300K, which I’ll bet they do, the reinstatement amount could be huge (and this also sucks out what little equity there might be in the property).

Also muddying up the water is that you have one, perhaps two, Realtors involved, both of whom presumably want a commission.

All deals are driven by one thing: the numbers.

What’s the house worth?
Does it need any work? How much?
How much is owed?
How many loans are there? Amounts?
How past due are they? Amounts?

My guess is that this house was bought with a first mortgage for 80% of the purchase price and a second mortgage for 20%. The first mortgage is probably an ARM, and the rate has gone up enough over the last few years to make it very difficult for the owner to make the payments.

If you had the time and desire, you could try to do a short sale here, but I don’t know how soon the auction is scheduled to take place.

I just don’t know that there’s a wholesale opportunity here. Put yourself in the investor’s shoes. What is there here for an investor to get excited about? How do they make money with this deal? Right now it sounds like you’re basically asking someone to pay retail for the property plus a fee for yourself.

Where’s the upside for your wholesale buyer?

I can tell that you’re eager to do a deal, but I’ll be surprised if this is the one for you. It would be nice, however, if your first lead turned into a deal.

Good luck, and let us know what happens.

Hey guys,

Well, he wont tell me how much the guy owes, interest rate, or back payments. He wont let me talk to him personally either.

The only way I can get this under wraps for cash and a wholesale is if he put down 20% three years ago, has a low interest rate, and it has appreciated a lot.

Its worth 311k

My best guess he owes like 280. For some reason thats my gut feeling.

So yeah, its pass time!

Thanks all!

Edit: well he responded again saying the same “he AND the bank want to see ANY offer!”

So I said okay, theres three things I can do.

1.190k cash at very best

  1. Subject to

  2. Short sale

But I explained the bottom two just a little. we’ll see what he says.

I hate new construction homes and new condos because there is no equity whatsoever.

Realtor won’t even let you talk to them?

Move on.

When does the listing expire?

Also, no reason you can’t look up the owner in the tax records and contact him directly. Sure it would be unethical to cut the realtor out and try to circumvent his commission but there’s no reason you can’t talk to the seller directly to find out what’s up and once you have the info and know its a deal submit the offer via the agent. Or you can tell the agent “Look, the only way I will buy this and you will get a commission is if I know what the particulars of this deal are and am able to talk to the seller directly. I am not trying to cut you out of this deal, I just either need you to get the info or allow me to get it direct from the seller. Help me to help you.”

For a first deal i think you should pass. Try to find something that isn’t a preforeclosure.

Where is the property located? send me an e-mail and i can let you know more of the specifics on this property. For example purchase price, default amount and when property is scheduled for sale.

What’s wrong with preforclosure for a first deal?

Well guys, I passed on that one, and I have another that I think is the same way.

Just appraised for 100k. Refinanced 6 months ago for 100k. payment is 840 a month at 8.5%. I need to call back to see if its an ARM. Hes 3-4 months behind on paments. He is filing bankruptcy. I don’t see how I can do this one subject to, considering I would have to make his back payments.

I feel bad, I actually handed the guy the flier in person and he was a good guy…

Edit: Is there anything he CAN do besides let it go to foreclosure? I dont think bankruptcy is a good option because chapter 13 will just spread out the back payments…

Nothing is wrong with it as long as you know exactly what your doing.

You can try a short sale. What kind of condition is it in?

He said its in great condition. He remodelled the whole thing thats why it was refied. But dont you need strong credit and finances to short sale? Dont you have to get a new loan through the bank? I dont think you can wholesale them etiher…

You can get a preapproval via a HML and doubleclose to wholesale it.