(Quick backround) After being self-employed for 13 years, I started a new business in 2005. In 2 years, I’ve gone from 700+ credit, $100k in open credit lines, and a first mortgage as my only debt…to a failed business, No cash, No credit, lot’s of debt and am trying to work my way back! But, God is good & things could be worse! I’m now a newbie (no deals) investor looking to start flipping some deals.
I just received a call on Friday from a seller lead. She stated their home is valued at $379k, is in foreclosure & bank had approved short sale of $260k…Sheriff’s sale is 10/18/07. Last night (Thursday), I got home & had a voicemail from her, that bank lowered short sale to $235K. This is their personal home, though husband is a builder & has 9 other spec homes in inventory that may present additional deals.
I would love a chance to take my first deal down & either wholesale or round robin auction to get some cash. I’ve been to some bootcamps & bought courses, however, none dealing w/ pre-foreclosure specifically. I’m looking for advice & input from the experts in how to proceed. Any advice would be welcome & much appreciated.
The numbers on this deal are close to one I’m finishing up right now. There were two liens, the primary for $316k and the secondary for $65k. The primary accepted $240 and the secondary $1k. The property appraised for $415k. Right now I’m waiting for the buyer to secure their funding (which is getting difficult with all the lenders closing) so I can put closure on this 9 month case.
Now in this situation I found the buyer through a loan officer within my network. This particular property is very unique so it was difficult to find a buyer. In addition to all the standard practices to find buyers I also tried an auction. We had absolutely no luck. Perhaps you would have better luck with yours. The only reason I tried an auction is because I was having no luck with anything else. Normally I prefer not to use auctions because it costs more money. But on the flip side, just the fact that it is an auction is attractive to some potential buyers.
Is the property in good condition? Are there qualified buyers in that market that would purchase the home as an owner oc at 80% LTV? If so, and you don’t have the money to purchase the home yourself, you could consider a hard money loan. They will eat up a chunk of your profit, but with a $144k spread you’ve created you can spare 15% or so to pay for the HML. Of course this would only work where there are no flipping laws to restrict you.
I’m now a newbie (no deals) investor looking to start flipping some deals.