Newbie
I'm a rehabber starting to look into pre foreclosures. I understand the process, but was windering if someone could give me sort of a play by play. Some of the questions I have:
If a deal is reached with the owner, do they then contact the lender?
Is the lender the one who cancels/postpones the auction?
Do you guys usually give the owner some cash or does it depend on the deal? I would think they would be happy just to avoid the foreclosure and ruining their credit. They lose the house either way right?
Thanks for any insights.
Welcome to the Foreclosure market!
When you reach a deal with a homeowner facing foreclosure you or the homeowner should contact the lender providing them a copy of the purchase agreement along with the party who is handling the foreclosure proceedings.
It is best to have an authorization to release information from the homeowner and proof of funds to show the lender that funding is available.
If you are trying to purchase the subject property for less than the amount of encumbrance you will need to perform what is commonly called a short sale.
The lender and the party that is performing the foreclosure proceedings will handle and postponements of the foreclosure proceedings.
Giving cash to the homeowner is diffidently subject to profit ratios of the purchase.
A homeowner who is facing foreclosure and the purchase of the property is tied to their motivation and financial needs. Not all are motivated just to avoid foreclosure. You need to uncover a customer's true need in an effort to strike a deal.
Article post on this subject:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=668
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=717
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=725
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=285
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=590
I hope this helps have a great and prosperous day
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JohnM, you always give such good advice. I wanted to ask a question. Let's just say, I wanted to do a "sub 2" in this instance. Would I just make payments on the loan after bringing everything current and offering some cash to the sellers>? and IF I should find someone who wants to buy once I have the deed, can I just "sell it" outright>? Just seems too easy to me. I feel like Im definitely missing something......from a legal standpoint or otherwise.
The only reason why you would need to contact the mortgagee in a preforeclosure sale is to ascertain the payoff, or if your Offer to Purchase is subject to mortgagee short sale approval. Otherwise, the details of the transaction are immaterial to the mortgagee.
Quote:
On 2004-12-21 07:38, Wayneone wrote:
JohnM, you always give such good advice. I wanted to ask a question. Let's just say, I wanted to do a "sub 2" in this instance. Would I just make payments on the loan after bringing everything current and offering some cash to the sellers>? and IF I should find someone who wants to buy once I have the deed, can I just "sell it" outright>? Just seems too easy to me. I feel like Im definitely missing something......from a legal standpoint or otherwise.
Basically you are correct, it is that easy, once you take control of the subject property by deed you can sell it, lease option purchase it out, rent it or what ever.
Doing a sub-2 deal is more involved in this and I would recommend that you research this area of investing by going to http://www.thecreativeinvestor.com/ViewForum34-8693.html
And
Reading the following articles:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=114
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=146
You will find John Locke's subject 2 course one of the best in the industry.
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JohnM,
I ordered Locke's course on today. Just received confirmation that it is on the way. Thank you for all of your advice. I will keep you posted on my first sub 2 deal.
You are welcome,
You will find that all of John's teachings to be vary good for your investing career. The best part you have him available for guidance and the entire family at TCI.
To your success!
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