lenders? foreclosure? preforeclosure?

Help Please!

I have learned so much through these forums and anwsers from yall. I thank you so much! :slight_smile: I need to know where to begin , I don’t have anything in savings and no credit cards. I’m going to have to rely on a lender of course. What I thought my plan would be was to buy a foreclosed propery fix it up and price it low to sell quick, because I don’t think I could manage the payments. Then build from that money I make and buy another property at an auction. Then start building on rental properties.

Any advice I would appreciate.

Botten line is …WHERE DID YOU BEGIN!!

Finding the Deals

• Place this classic ad in your local paper’s real estate section to appear on Sunday: If you can afford to run 7 days a week, then you won’t miss any sellers who need to act fast, Negotiate with the newspaper for a better rate.

I buy properties.
Will pay a fair price w/small down pmt.
Quick closings call (your name) @555-1212

• Start calling for “sale by owners” out of the classifieds and ask them all the questions you can up to the point that they have had enough or you find that it is not of interest to you or to schedule to meet them at the property to further investigate. Note: If they are difficult to talk to on the phone, they may be difficult in person – brace yourself!

Your script to use when talking to sellers (see breakdown for insights):

  1. Do you own the property?
  2. Why are you selling?
  3. How long have you owned it? How old is it?
  4. Are there any problems with it?
  5. Can you tell me a little about the property?
  6. When can I see it?
  7. Whatever else you want to know, ask!


I. Do you own the property? If yes, now I know to go further.
If no, well who is the owner?
The following are possible answers with some possible conditions:

  1. Out of town owner – unfamiliar with current market conditions
  2. Incompetent to negotiate – power of attorney
  3. Passed away/executor of estate – quick sale, legal authority
  4. Real estate broker or organized selling entity – it may be overpriced.
  5. Bank officer or foreclosure agency personnel dept. – lower your offer
  6. Sophisticated lease optioning reseller/investor – big bad wolf! Are you alpha dog material? Are you smarter than the wolf?
  7. Yes - go to the next question

II. Why are you selling? These are some of the biggies:

  1. Divorced – Often 2 parties must agree, distress sale, “don’t wanters”, bad memories
  2. Death – Executor, quick sale, high emotions, be considerate, tactful, caring
  3. Relocation – quick sale, quick closing
  4. Downsizing, “empty nesters” – maybe will agree to owner finance? Ask.
  5. Moving to larger home – they will wait to get their price; price may be high due to new demands but not always.
  6. Looming foreclosure – willing to negotiate, takeover payments, make up delinquent payments
  7. Have a new home, need to sell this one – quick and in a bind
  8. Was a rental, I’m tired and want to cash out! Probably sophisticated but may be a serious “don’t wanter.” Hint: Ask if they have any more rentals for sale!

The more you know, the better you can solve for the problem. Ask subsets of questions to understand more fully.

III. How long have you owned it? How old is it?

  1. A long time – possible large equity, maybe owner financing, ask!
  2. A short time – no equity, a reseller, rehabber (fixer-upper), divorce, transfer, lost job?
  3. After 1978 – no lead-based paint disclosure required
  4. Before 1988 – financing may be fully assumable, ask!
  5. 30 years or older – inspect electrical, plumbing & heating closely, professional home inspection is a must!
  6. How many people have owned it? Why did you buy it?
  7. 50 years or older - difficult to finance
    Statistically, people move on average every 5 years.

IV. Have there been or are there any existing problems that you know of?

  1. “Well, yes, it has _____.” - you must decide if you want to deal with it.
  2. “I don’t know”, “I’m not sure”, “I don’t think so”, just little things – get a signed disclosure statement and a home inspection. They may be concealing defects.
  3. “It’s not mine” – go back to the first question if you missed it or they lied.

These questions begin to either interlock with previous questions or contradict them. Use these questions to cross check previous questions and answers, to develop your gut feeling, get clarity and root out deception! (Use all your scripts with this in mind.)

V. Can you tell me a little about the property?

This is the catchall. When you ask this question, be quiet and let them fill the voids of silence. Bite your tongue, ask open-ended questions that get them talking. You’re not looking for yes or no answers. You want their rambling life story. With this question, you may get the whole story, the true facts behind the sale. It’s one more chance to get them to volunteer information. Invoke the ASK principle and learn more – probe! What, why, where, when, how, who, anything else I should know? Ask.

VI. When can I see it?

  1. Schedule it for daylight hours and don’t go alone. Bring a knowledgeable assistant for evaluation purposes and safety.
  2. Try to see it as soon as possible! If it’s a good deal, it will be sold before you ever get there. Don’t get beat - push to see it quickly!
  3. Schedule as many as you can and see more than one while you’re out if possible. Don’t forget your street finder, newspaper, notes, offer sheets, phone and flashlight.
  4. Call the reverse listing phone operator. If you have a phone number, they will give you the address. Use your street finder to go straight to the property and see it immediately. Beat less educated hunters.

Don’t get sucked into an auction atmosphere.

VII. Ask anything you want. If you have any further questions that need to be answered, now is the time.

P.S. If you are selling, have your answers ready and be prepared to answer
The same questions, as they will be similar to the ones you asked above.

Back to hunting!

• Look at bulletin boards, local papers and small independent publications. This goes for every publication you get. Make sure you get one of the first copies off the press. Go to the facility that houses the presses and get your copy before the ink has a chance to dry. Let no one beat you to the punch.

• Better yet, advertise yourself and get people who are thinking about selling to call you before they actually tell the world through an ad.

• Look at the legal section of the newspapers. Contact heirs, attorneys and sales in the garage or estate sale sections. Also, 20% of people who have garage sales are planning on moving soon. Ask about the house or their neighbor’s homes. Always keep your antenna up!

• Your odds of success increase when you choose large population centers and remain in the market constantly on the lookout for your type of deal.

• Look for vacant houses, run down, fire-damaged, abandoned, with city notices evident. Talk to the neighbors of these homes. They usually know who owns it and what is going on. They have an interest in seeing it restored to beauty. It sure is a shame you can’t look in the mailbox to see who is receiving mail at the property in question – wouldn’t that be easy?

Don’t be afraid to walk up to a property and look in a window to confirm that it is indeed vacant. Don’t endanger yourself by getting bit or shot! Use common sense. Contact out-of-state owners through property records, by letter and/or phone. Leave your cards on the door!

• Oreo stands for Other Real Estate Owned. Make friends with your local lenders and let them know you are the one to call when they have a foreclosure looming or in progress. Hint! If you will Pre-qualify with lenders beforehand they may call upon you sooner. Pre foreclosure then Auction, if not sold at auction then it goes back to lender as O.R.E.O.

• Again, watch the local paper for foreclosure auctions, tax sales, HUD and VA listed properties. Note: Auctions held in bad weather where the property absolutely must be sold, are your best chance to limit competition and get property at rock bottom prices, due to the fact that there is no low limit on what can be accepted (no reserve) you may win big.

• Real estate agents are going to try to sell you something! When you approach them be very specific with them and tell them to only call if they have an absolute steal. Ask agents to give you those expired listings, since they couldn’t sell them. Suggest a 2% commission if they will assist with closing the paperwork after you make the deal with the seller on your own.

• Don’t be so selective. If the property is an absolute steal, lock it up and sell it to somebody who does like to work with that type of real estate. Condos, trailers, residential lots. Get the option and hand it off to another buyer. Look for distressed sellers in addition to distressed property.

• Post fliers everywhere – colleges, laundromats, shopping centers, bowling alleys, public bulletin boards, churches and local businesses. Wherever large numbers of people congregate, give them a chance to give you a lead on a hot deal. (I.e. I pay $500.00 to you at closing if I buy a house that you told me about! Do you know anyone who is selling property? Please call [your name] at 555-1212.) Print quality business cards.

• Join organizations of all types. The sky is the limit. There are so many –just pick the ones that you would be interested in truly being a member in and let it be known you pay bounties for consummated (closed) deals.

When you use headhunters, leave out no one. Property managers, moving companies, relocation services, neighbors, landlords, tenants, the mailman, the paper boy, gardeners, landscapers, service technicians, pest control people, friends, acquaintances, relatives and other investors. You name it! Everyone should know they can make $500.00 if you end up buying a property they tell you about – enlist your army! On commission, only pay when you close the deal! Give each of your soldiers stacks of your cards for exponential growth.

A special note here: Water, Gas, and electric company personnel who shut off
utility meters can be very good bird dogs, when it comes to finding property that
is in trouble or vacant. give them those bounty cards below.

• I suggest you have at least 10,000 business cards made with your offer of the $500.00 bounty and hand them out in stacks to everyone you can.

• As you grow, you might consider T.V., radio, phone books, billboards, street benches, bumper stickers, bigger commissions. Use your imagination.

• Put up signs telling people you buy real estate.

• Make multiple lowball offers on overpriced properties and walk away. Don’t deposit earnest money but they may stew on your offer and call you a month later accepting your deal. Leave the offer with them.

• Older people should not be left out. They are very valuable informants. They know everything and need people to talk to! Listen to them.

• Go to free seminars on real estate. Not only to learn about real estate but also to capture names and circulate amongst real estate minded people. Once you have their names, call your own club meeting and network to prosperity. Find your mentor here.

• Go to where people are buying those “by owner” signs. Ask them what they are selling. Follow them home and get the first look! Be first or lose the deal.

• Try offering 15% less than what you intend on paying. You never know – they may accept it. If they don’t, you can still negotiate up to 15% more and get it for what you originally were willing to pay. Any higher, walk away but leave the offer on the table (the offer stands).

• Make your offer easy for the seller to understand. Get the option to buy but use a contingency to protect yourself. Iron out the details later but lock it up now!

• Buy from sellers who tend not to care: seized, foreclosed, tax sales, corporations, non-profits, disinterested heirs, probate attorneys and private auctions.

• Try just helping someone to sell his or her property even if you don’t want it. Be a friend and offer to help for nothing in return. You will be amazed at what happens when you sincerely try to help with no thought in mind of making money. This is a magic bullet in disguise.

Those are some of the basics of advertising and finding the opportunities to buy real estate below market. The old saying goes, you make your profit when you buy, not when you sell.

There is also a getting free getting started e-book here.


Free forclosure e-book here:


And a weekly schedule here: http://www.reiclub.com/forums/index.php?board=29;action=display;threadid=2976

I have the same idea in mind as wicker 8.
I.E> Buy two foreclosed property @ 40k, 10k to rehab property = 50k
appraised after work completed @ 85k sold for 80k.
profit of 30k.
I was going to use the other property to pay back loan of $450.oo payments to lender.
rental income on second property is $650.00.
working capital= 30k and monthly income with one property=

I do pay to get the foreclosure report and I drive out to the properties and take a look at them to estimate cost of repairs.

I have the plan now all I need is the lender with the capital.

Do you have to worry about any seasoning issue. I thought you would have to sit on the house for a year… If not this could happen all day. Please let me know :slight_smile:

You can face seasoning issues and this is subjective based upon a lenders policy, not all lenders have restrictive seasoning issues but in most cases if you can prove sale value vs your purchase price and repairs lenders will waive seasoning issues if your case is founded upon factual data that can be verified.