Hi All.

I have been sending mails to pre-foreclosure owners and received few replies. When I received the phone call from the owners, I usually ask about property such as mortgage (how much they owe, how long their payments are behind etc.), property value (this is owners opinion and I use for my info), repair etc.

Although most owners mentioned that they want to stay the house, I kindly mentioned that I may give them some options, but they have to move out the property sooner or later.

OK, let’s say they understand (I really don’t want to take a chance here. There may be some option such as L/O but if owner can’t afford to pay their mortgage, how come they can pay me monthly installment???)

So I usually mention about short sale. I say that may be I can negotiate their lender to pay off mortgage (no promise here). Then, owners usually ask if I will be able to pay all the money they owe from bank. So I simply reply that maybe bank will discount the amount but I can’t tell how much or what %. They usually understand, but after I mentioned bank may be discount the pay off amount, they tell me if I can pay to the bank less than they owe and they will lose the house, they would like to list the house through realtor so that they can pay off debt and get some money from the selling price.

I have talked 3 owners so far, but all the conversation ended when I mention short sale. They don’t like the idea that they have to lose the house and won’t get any money.

Do I miss something or the owners are just NOT motivated? I mentioned that I may pay you some money for them to move out next place but I can’t tell them yet.

Also, when you talk to the owner and s/he ask something like "I don’t know you and your company. So how can I sign any papers (such as release form), how do you deal with them?

I have read and learn many REI materials and start taking action. I know that I need more practice and experience.

Any investors opinion and advise are appreciated.

Thank you!

Hi Amanda,

Trust me - the Sellers are motivated if they are in foreclosure, they just may not know it yet or really know what kind of trouble they are in. They called - so they are motivated. They will become more motivated as time quickly passes. Some just don’t know what to do and many of those do nothing and lose everything. Congrats on taking the first steps and talking to sellers. You are exactly right most want to stay in the house but how can they pay you if they cant pay their mortgage. Well, Find out why they didn’t pay their mortgage, not just what they owe and how much the percieved house value is. Maybe they lost their job and have recently been re-employed, Maybe they had health issues and are getting back on track and just need some help. You must know what their situation past/present/future is before offering any type of solution. Maybe they don’t have to move after all! Maybe they have equity in the house maybe they don’t. If no equity, a realtor won’t touch it - they won’t get paid. If they can afford a realtor (have equity), then perhaps you can give them some cash to go. Until you know they must move on and convince them that it is in their best interests (credit wise/cash wise/peace of mind wise-whatever), I wouldn’t even discuss a short sale. Short sales may have additional consequences to the seller also (increase in income to them for the difference of short sale & loan balance). Know their situation and offer appropriatly - don’t throw a hundred options at them - it just confuses them. If they have to go - maybe offer to give them some cash, catch them up on back payments, and make their payments for a couple years (HELPS THEIR CREDIT GET BACK ON TRACK) for the deed. Find a buyer who can cover what you laid out plus some, get some cash flow for a couple years, collect the rest when your buyers buy). They must understand if they have to go or not and their situation will tell you that. They must understand that the money fairy isn’t gonna sprinkle any gold dust on them to save their butts if they don’t act. Unfortunatly, many wait for that magical money fairy and realty only sets in when the sheriff escorts them from the home. Some you can’t help at all so just must move on. Remember - Don’t buy just cause ya can!

I think your approach is too wishy washy and I think you have to take control of the situation and offer if you can the direction you can take them. If they don’t agree, then ofer an alternative solution. But Don’t say well we could do this or that or the other thing or a short sale. Guide them to your goal and their goal when possible. They have to feel good about it and so do you!

Good Luck


Hi Kevin.
Thank you for your kind reply.

What you said made me think that I also have to think about owners Most of the owners (only 3 so far) doesn’t want to lose house and also kind a denial that they are financial trouble. However, they think that they have enough time to catch up with their payment and don’t really think they will lose their house.

We have 4 month redemption period here in NY plus whatever period the lender will file complaint. That means, owners some time have about a year to pay off their back payment…many people think it’s enough to pay off all the money. I will search those owners either in or just about in foreclosure.

I will try to the seller first to know their situation. If they have enough equity, they may better off to list or sell by themselves unless they want to sell me below market value. Otherwise, they simply not for me. I have to be more creative, I guess. The problem I have is that when I talk to the owner and learn about the situation such as loan balance, default payment MKV, I don’t have the answer there. All I can tell they is something like “I may be some options but let me talk to my partner and will get back to you.”

You are right, maybe it’s not good time to talk to the owner about short sale until owner really wants to get rid of the house and move out. They may be scared when they hear they have to move out, they don’t get any money from me (I may pay some money to move out ) but your credit will be paid off" especially right after house is in pre-foreclosure stage.

OK, I have another question, so what is the major purpose to talk to the pre-foreclosure (foreclosure) owner? I thought short sale is the only their solution.

I will change the attitude and try to know about the owner. Who knows they when time passed and when they really need help or don’t know what to do, they may call me for help. My job is to solve their problem and create win/win solution.

Thank you for your help!


Hi again Amanda,

The trick in our business is to find what the seller needs and give it to them as long as you win and they win. If they have awhile before the pressure really gets turned on - they are most likely not motivated enough. Some may be tho. Deal only with the very motivated ones and let the others go. Send them to a Pre-Foreclosure specialist who may be able to get them back on track if they believe that this could be accomplished. Don’t waste alot of time on them - you have to be able to seperate the gold from the dirt. It is imperative to know their situation to determine if you can help them or if they even want to be helped. Most are in denial, embarrassed, etc.

The purpose of talking to them is to understand their situation. Once you see where they are coming from you can determine the direction you need to take. i.e. they are not ready yet, they understand their situation is serious and need to act, or they are in denial. You can’t force a deal. i.e. can lead a horse to water but can’t make em drink.

Your job is to explain to them their consequences of not acting in time. If they fail to act in time - they lose. Back it up with statistics and examples. Send them a step by step of what happens. Once they reach REALTY, now you can deal with them and get their house in some cases. Some will never let go - Remember they have worked hard to get the house and just don’t believe the bank will take it. It is their #1 asset.

You don’t want to give them the impression that you are stealing their house either, you want to help them move on with their life so they can rebuild. You must make them understand the seriousness of the matter and how you can help them at least save their credit.

If I were you, I would change direction and not deal with pre-foreclosures at this point unless they are ready to move and you can save their butts to some degree. Go for the easier sales (those that are motivated to sell to you) i.e. those who purchased second home and have not sold first, people not in pre-foreclosure and already realize they need to act and are willing to do so before it gets worse, job transfers, divorce, probate cases, landlords who are tired of being landlords, etc.

When you deal with pre-foreclosures it’s like swimming against the tide. They tend to fight you all the way,think you want to steal their house, and somehow it turns out to be everyone elses fault except for their own. It’s a tough market. Provide them with info. tell them how you can help them, and move on to the next one. They will call when they are ready. Just imply that at some point if they don’t act in time you won’t be able to help them. During this process - keep in contact thru mailings every couple of weeks (friendly - NOT I want your house). If they like you and know you are trying to help them - its a big advantage for you. If they trust you-they will sell to you.

I’d go for the easier markets tho until ya got some sales under your belt and have talked to more sellers. You must control the situation. Give them 1 option and 1 option only after you analyzed the situation and property and work from there. Don’t talk to your ficticious partner - take control and let them know this is what you can do. Hear their response and adjust but keep in control. You don’t want them to think they have a whole host of options out there - they don’t - they only have you.

A short sale is not the only option for them in pre-foreclosure, you can aquire the property anyway you can, but may become the only one if they don’t act in time.

Remember you will always get alot of no’s before you get a yes. Give them your fix and move on until they call again, but keep in touch with them. Some will eventually fold to you. The longer they wait, the more cash you will have to put upfront out of your pocket. Thats why I suggested an easier route other than pre-foreclosures.

Keep plugging away!

Best regards,


Amanda I am in NY too and wanted to know what you think of the market and are you located in the boroughs or in Manhattan?

Hi Misting22.

I am in Westchester County which is North of NYC. 30 min from Manhattan.

Market is very strong here and property tax as well.

Where are you located in NY?


Hi Kevin.

Thank you very much for your reply.

Yes, finding MOTIVATED sellers are key of the business. Many “say” motivated, but reality is they are NOT really motivated. They want to sell their house but not MUST sell the. :slight_smile:

Like most of the states, market here in Westchester County is very strong and sellers also know about it. So when they try to sell the house they want top market $ even though the house needs TLC.

As I mentioned, I am just started. I would say that I have learned and read many materials so you can call me “book smart” :), but learning from books and semimers and taking action and talk to the owners are completely different story. I originally tried “wholesale” since it’s easiest (nothing is easy but as long as numbers are working for me, I can flip to the investors who does rehab); however, I don’t want to limit myself and market is very strong, I have decided to try direct contact to the owners (pre-foreclosure). I have mailed about 100 letters and get 3 response which is not bad. So I will try mailing to them periodically. Their need and situation will be changed time to time. The purpose to try pre-foreclosure is to find owners who has financial problem. I don’t think all owners want to sell house right away, but at least I know people who need help sooner or later. Maybe they will find solution which is good for them, but if they don’t, I want to be someone they can call.

There are many REI methods and after learned them, I choose wholesale and pre-foreclosure. I don’t want to try all of them at once and end up nothing worked and give up.

When you say easier rute than pre-foreclosure, what do you mean? Wholesale or retail?

I really appriciate your help and advise.

Thank you!


Amanda I am located in Queens which is about 30 min away from westchester. Where did you purchase your pre-foreclosure list? was it online or did you go to the conunty clerk office?

Hi Kameka

I know Queens :). I don’t really know the area but I have friends and my husband’s relatives live in Queens.

Regarding pre-foreclosure (which we called Lis Pending), I checked county cleark. As you konw, those information are in public, you can find very easy. I don’t know about Queens, but it may have some information. If you would like to know about Westchester area, please let me know. I’ve lived different are in Westchester and my husband is from the area, so I can give you some idea.

Have you tried any deals?


If you have the means to buy the property, and dont need to flip it, perhaps you could purchase the house, and rent it back to the occupants. You’ll be giving them cash for the house, which they will then be giving back to you, a month at a time, over a few years. Then you’ll own the house free and clear.

Hi Kevin and others,
I have been a remodeling contractor and have usually had house I was living in and rehabbing to sell. I usually stumble on a distressed property and a motivated seller. Recently, I have decided to focus my business on investing and would like some input on where to find properties. You mentioned in your reply to Amanda that she should start with the easier sales than foreclosures and I was wondering if you have some suggestions for locating these? Thanks - and thanks for this forum, I am finding lots of good onfo.

Hi Frank.

I think and everybody knows, the key of this business is to find motivated seller. When seller is MOTIVATED, s/he will begg you. When I asked about pre-foreclosure, Kevin mentioned to go to easier way. I was told several people, if you are newbite, start wholesale since you just find ugly property and sell to investor. It’s only one time deal and you can get cash in your pocket. There is no monthly income, but some cash in your pocket. Of course, if you buy and rebab, you will get more cash. I have tired and still trying to find those ugly properties; however, it’s hard to find in my area. Well, there are handyman special properties, yet asking price is not enough to sell to the investor with profit.

Some of them told me pre-foreclosure (shor sale) is easy. But again, it’s up to individual.

Well, I am still learing.

Hope everything works for you!


What I thought was interesting was Kevins suggestions for leads - landlords tired of being landloards, people who have bught second homes and are having trouble selling first, people in trouble but not yet in pre-foreclosure, job transfers, probate, divorce, etc. This sounds like great advice since the houses I have bought in the past fall into a few of these catagories. I am wondering how to actively pursue these type of leads since what I have found in the past was mostly “stumbled” upon. You can find pre-foreclosures at the courthouse and I suppose that might be a good place to find people in divorce, probate or bankrupcy. But what about landloards, second home buyers, job transfers, etc. Any suggestions from anyone actively pursueing these?


It is a very bad idea to leave the HO in the house. There have been court cases where investors have rented/sold the house back to the HO only to have a judge make the investor GIVE their house and $ back to the HO. If you want you can place them into another of your properties.


Your approach to pre-foreclosures should be that of helping the HO solve their problems. The first thing you should ask is what they would like to do. Go through their options (refinance, FSBO, BK, nothing :-, forebearance, or sell to you ;D). Dont approach them with only buying their house because you will be seen as a threat instead of as a friend.


Hi Jake.

Thank you for your advise.

Like you said, I will talk to the HO and ask them what they want. I have only talked few HOs and realize that they don’t really know the process of foreclosure. So they simply say something like “I want to pay off the debt and stay the house.” Well, I do understand. They think that they will come up with money sooner or later.

Like you say, I will ask them what they want to do. I will aso try to explain to them about foreclosure prosess and let them know that I am there to help them not to steal their house.

Thank you for your advise!