Hi guys, I’m considering wholesaling pre-foreclosure properties. Has anyone done that and what’s the process from start to closing? Thanks for your response.
The thing about wholesaling pre-foreclosures is that you will need to pay off the liens on the property including any fees, interest and penalties. If there is a second, then the sales price must cover that too.
The problem here is that a vast majority of loans that are close to foreclosure are ones that have very little equity. In that case, there is very little - if any - profit in these deals for wholesalers.
Additionally, if the property is a short sale, you are going to have around a 2% chance of pulling a wholesale deal via a short sale. Banks do not like working with wholesalers.
The only way you can wholesale these properties is to get the owner to agree to do a short sale. Once the owner has agreed to work with you and your team, you should seek out the best short sale negotiator in your area and delegate the negotiations to him or her.
Hopefully your negotiator does a great job where you guys can get the property at a good enough price to wholesale. So there is an opportunity there.
By the owner being in default with their payments you can also potentially have a subject-to on your hands, but you will need some upfront cash to pay the back payments to bring it current, then once that is completed you can potentially wholesale the deal if there is enough equity in the property for profit.
Hope this helps! :smile
Thanks but how about if I take it subject-to and find a rent-to-own buyer how would I structure it… And will my tenant buyer be able to refinance it? Thanks
ok guys, back to wholesaling. being that i’ll be dealing directly with the owners because the properties are not yet in foreclosure, lis pendens are worth the shot, right…and how would you go about it? bytheway, anyone know of any closing agents who do double closing in new jersey?
When I advertised the first property under contract I met tons of great investors in my area who where willing to give me sound advice and referals. I suggest you lock up a property and advertise it to your local REI club, that’s where you’ll make the best connections.
Thanks Evanpoo, I really appreciate the advise. Great idea. I’m off to property hunt now.