Beginner... Need Some Guideance?
Hello everyone.
I was wondering what the best way is to buy a property that is in default from the banks before it goes to auction. I live in Pennsylvania, have gone to the court house and have found a number of properties that are soon to be auctioned off (within the next month or so). Is if acceptable to contact the bank directly and make an offer that is 1/2 to 3/4 of what the outstanding balance is on the loan.
I would like to buy directly from the bank(s). Fix the property up, and re-sell at full market price. I have enough cash on hand that I would not require any financing. What is the best strategy for accomplishing what I want to do? short sale, wait for auction, etc. etc.
Thank you in advance.
S. Kotran
You cannot purchase a home from the bank that is in pre-foreclosure state (hasn't gone to auction), as at this stage it is not owned by the bank. Your best bet is to try and contact the owner, to see if they are willing to sell.
Hello Lehigh Valley! I am just north of you (Poconos)and have had some success sending letters to homeowners in pre-foreclosure. Unfortunately, I have not had the same success with the lenders. I think they are getting smart to us investors. They are also getting high BPO's which bolsters thier stubberness. Maybe we could help eachother out, sharing advice particular to northeast PA. I have found this site to be a Godsend, however also find other areas of the country don't have a clue how hard it is in northeast PA. Sometimes I feel like I am playing with a different deck.
Oops! Maybe I should have looked at the date of the original posting. I didnt realize it was from a year ago! Anyway, If anyone has any input to my comments please respond. Thanks
WeAllWin...
My post was actually from just a few days ago... I would love to share some ideas with you, Last year a bought a forclosure through HUD and did quite well with it... however, it was much more work and cost much more than I had anticipated. I have found that the properties you can find under the HUD listings usually need a bit (a lot) more work than anything else (at least I think they do).
My problem is that I really do not want to deal with people who are down and out, I'm not such a great people person and do not like putting on a sales pitch. I would much rather stay behind the scenes. Real-Estate is where the money is at... I lost my shirt in the stock market so decided to take a little risk on a HUD forclosure. It worked out well for me and now I have a good bit of money to do it again. My main question is how to buy without having to deal with selling a homeowner in distress (there are hundreds of other people around here doing the same thing - and most likely better talkers than I am). Should I wait until these houses go to auction? I am most likely going to stay away from HUD from here out - way to expensive.
On another note: the Pocono's hmm... good skiing, maybe we'll catch you on the mountain.
Not all have the skill or even the patience in dealing with homeowners facing foreclosure. You can offer to purchase the delinquent not from the lender and foreclose on the property yourself.
During a preforeclosure you have no choice but to deal with the homeowner as they are the only ones who have the right to sell the subject property until they no longer have title.
You may want to recruit others to find and negotiate on your behalf and simply pay them a fee for doing so at closing.
If you do not wish to deal with homeowners facing foreclosure you have no choice but to deal with property that has been taken back by the lender through the foreclosure process or with investors willing to wholesale property to you.
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Do not give up on the HUDs. I remember just a few years ago in the Allentown area HUDs stayed on the market for months and sold for less than the asking price. Markets change; right now Allentown real estate is booming but like the stock market every boom has a bust.
Everyone... thank you for your replies. Very helpful information.
I guess I need to do a bit more homework on the short sale process, etc. before jumping in.
Let me ask just this one last question. Let's say I can obtain title on a property (at a tax sale) which has a number of outstanding leans associated with it. Is it commonplace to negotiate with the banks (on reducing outstanding balances, etc) at this point, or should I not even waste my time? From what I understand the banks are not to willing to negotiate in the Allentown area.
Thank you again for your replie(s) in advance.
Quote:
On 2004-12-20 12:06, skotran wrote:
Everyone... thank you for your replies. Very helpful information.
I guess I need to do a bit more homework on the short sale process, etc. before jumping in.
Let me ask just this one last question. Let's say I can obtain title on a property (at a tax sale) which has a number of outstanding leans associated with it. Is it commonplace to negotiate with the banks (on reducing outstanding balances, etc) at this point, or should I not even waste my time? From what I understand the banks are not to willing to negotiate in the Allentown area.
Thank you again for your replie(s) in advance.
Yes it is common place to negotiate with lenders and lien holders in an effort to reduce outstanding balances.
I think that you are assuming that lenders in the Allentown area are unwilling to negotiate and with this assumption you will be hard pressed to negotiate a discount offer since you do not believe it can be done.
This type of assuming is a negative - and negative thoughts about your offer as the offer presenter is a deal killer - if you can not believe in your offer and support your offer their is no point in making the offer!
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