I have recently started to send out letters to owners that have just began the foreclosure process. I am sending them letters that state their house can be bought with cash. I want to simply get some property under contract and then flip it to rehabbers. My question is out of a list of around 15-20 pre-fore’s a day, many are newer homes. Is it realistic to send these homes letters? I do not think so because there isnt really any equity built in yet, but I would like some more opinions. I am targeting homes that are atleast 20-30 years old. Am I on the right track? Thanks for the input.
It really depends on what type of loan they have, don’t you think? If these newer houses are under a conventional loan, then even a balance on a newer house would be <80% since conventional loans require 20% down. The key is to find out which homes are conventional and which homes are FHA and “other” types of financing, such as the popular 100% - 105% financing. Obviously, these homes probably have no equity in them.
On the other hand, doing a short sale on a property that has no equity could let you “create” some equity, hopefully enough to flip or assign to a rehabber or simply sell outright to a new buyer. I’d recommend searching/browsing through the Foreclosures, Short Sales bulletin board on this site. I’ll bet you’ll find some good ideas there!
The problem now a day is most banks are insured for their loss. There for the short sales are not what they were 2-3 years ago. And if there is equity in a property they will not generally do a short sale do to the fact they want that property. To make up for a loss on another. CASH IS STILL KING.
Also people in Foreclosure get hundreds and hundreds of mailers you got to think outside the box and do something original to get there business. I still do mailers but with a twist…
What’s your twist?