This could be my first move into the real estate, well Ill be paif for the lead, but there is a new home built in 1999 in a new home forestry area, close to schools, etc. And its value is 300k. The house is in pre status and I was wondering what to do about it, because only 61k is owed. Any suggestions?
Hello Chitownman,
Well… what have u done thus far??
I’m assuming you contacted the owner… are they motivated?? do they know they need to move??? have you done the comps on the property??
are you planning on assigning it to another investor??
Alot can be done here… But what do u have in mind!!!
MONEY!!!
As Money said, there is a lot that can be done. What matters is what do you WANT to do with it?
Also, I see numbers like these from newbies alot, and they rarely turn out to be accurate when they start really checking things out. I’m not trying to discourage you, just letting you know. It’s like the old saying, “if it’s too good to be true, then it probably isn’t true.”
How did you find out the values of the property and the balance owed? Why is it in preforeclosure? The answers to these questions are very important.
Here’s why. Let’s assume your numbers are accurate ($300K FMV and and $60K loan balance). The owners would have to have some serious (and I mean serious) credit issues and/or legal troubles NOT to be able to get out of this “problem.”
The owner could simply go to a lender and say, “I’ve got this property worth $300K. I’d like to borrow 50% LTV, or $150K on it. I don’t have a job, terrible credit, etc, etc. However, I only owe $60K on it. I know it’s going to cost about $5K in closing costs which will leave me with $85K. What I’d like to do is open up an escrow account with that $85K to make the payments on the loan until I can get back on my feet. Is that okay?” I can’t think of a lender that would turn that down.
Even if the owner had to pay a whopping 10% interest, on a 30 year P&I note, the $85K would make the payment for just over 5 years.
So I hope that you can see why I would be cautious approaching this deal as it is probably not what it appears. However, sometimes they are, so check it out thoroughly.
Raj
Beds 5
Baths 4
Square Feet 2988
Lot Size 47149
Bldg Price Sq Ft N/A
Lot Price Sq Ft N/A
Tax Assessment Information
Land Total $5,195
Improvements $4,617
Assessed Total $9,812
Foreclosing Loan Information
Balance N/A
Loan Date N/A
Loan Doc #
Trans Date 9/29/2000
Trans Value $61,500
Foreclosure Information
Default Amt N/A
Status Pre-Foreclosure
Recorded 2/17/2005
Entered On 4/15/2005
Last Payment N/A
Opening Bid N/A
Sale Date TBD
This was found on RealtyTrac.com
Drove by and there is a sign that says “We sell houses” or something like that with the companies name.
I went to the places website, and couldnt find anything of the house, I will have to do some calls, not sure if I can do much this weekend, so will have to wait till monday. And i know if its too good to be true it probably is. I just figure, I could let an investor know about it, or I might take it up myself it is true. I don’t know much about real estate because I’m just now learning the ropes, but when a friend came along and showed me this it shocked my eyes. The only thing I’m curious about is why the house is in preforeclosure, and the owner or whoever has a sign on it already. Any advice would be helpful. But I will be doing more research on this house this weekend, so Ill keep you posted. Thanks!
Hey Chetownman,
Well it seems to me, from the sign infront of the house, that you got some competition in your market… “WE BUY HOUSES” is usually an investor advertising.
Looks like an investor is already a step ahead of you and was thinking the same thing. Possibly a short sale!!!
You said you were going to investigate over the weekend, what did you find out??
MONEY!!!