?'s on REI's preferences on where to buy in the foreclosure process

Foreclosures, Short Sales, Tax Foreclosures
1

I was wondering what some of your preferences are or what you’ve found works the best. My wife and I would like to get started in REI but we’re quickly finding out the how hard it is to find a decent deal. I’ve just started considering foreclosure properties as way of getting these deals. I think the properties we will be most comfortable with are single family homes that we can either fix and flip or fix and rent out. I’ve driven by several homes that are in the preforeclosure process I have a good deal of interest in one that just happens to be close to my home.

Anyway…to my questions:

  • I’m not comfortable with the process of contacting the owners and, if interested, setting up a short sale. I’m much more comfortable with waiting for the lender to buy the house at the auction and then dealing with them. I obviously lose some profit by going this route but there is also quite a bit of leg-work that this saves that I’m willing to give up (mostly because I’m not there experience wise). Have any of you contacted lenders in the pre-foreclosure process and expressed interest in a property? If so, did the lender still offer you a below market value price on the property after they own it or is there a good chance the lender would just get the agent involved right away and list it at or above FMV?

  • I realize I have a lot to learn but I’ve learned a good amount in the last 2-3 months just reading and paying attention to houses/duplexes for sale in my area. How long was it for some of you from the time you were interested to the time of your first deal (foreclosure or anything REI related)?

Thanks.

2

I’m sure others here will have more to contribute to this than I do, but I don’t know that you will have much success contacting the lender while it is in pre-foreclosure. Since they don’t own the property yet, they can’t discuss the situation with anyone without the homeowner’s permission. Once the sale is complete/confirmed, most lenders will list the property with an agent. The agents are usually contacted by the bank before the sale is complete to determine occupancy, secure the property if vacant, etc. Sometimes they will put a small sign in the window before it is listed telling you who to contact regarding the property, so it might be possible for you to find out who the listing agent is going to be before it is actually listed. You can let them know that you are interested in the property and ask them to call you as soon as it is listed.

3

i am no pro but i know that if you visit the hud werbsite for example, they’re asking price is very close to market valu. sometimes peopl bid over market unless it’s a junker and been on the market along time (which may be good for you. but when other investors see this they jump on it and pay cash. if you can pay cash, close quick, do your own inspection then your already ahead of the game! good luck ;D