When dealing with pre-foreclosures....
When i'm in a position to purchase a home from a distressed seller do I need to meet with the lender?
Also, I think i am correct in thinking that many lenders will probably want immediate payment of the entire mortgage balance when a transfer of deed is made?
Thanks for the help!
realestateprofit,
Yes, if you tell the lender you are taking over the property they most likely will want there money.
A little specifics on what method of investing you are trying to do will be helpful, give us a senerio.
John $Cash$ Locke
Quote:
On 2003-01-19 19:17, JohnLocke wrote:
realestateprofit,
Yes, if you tell the lender you are taking over the property they most likely will want there money.
A little specifics on what method of investing you are trying to do will be helpful, give us a senerio.
John $Cash$ Locke
John,
Thanks for the quick reply.
Let's say I meet with a distressed owner who has a bit of equity remaining in their home or the home is in disrepair and they are in default (simply speaking...profit to be made). I deal with the person and after negotiating come to an agreeable purchase amount. Possibly then sign a purchase agreement with a financing contingency (with a specific time frame to locate the financing). If I cannot, then I would look into possibly passing the deal to someone else.
Either way, this is where my question comes into play. From the way I read your response....I take it I don't need to contact the lender until my funding has come through and then pay off the existing balance?
Thanks!
Vic
Vic,
My first question would be why would you buy a house in preforeclosure, with little equity and needs repair?
Where are you going to get your profit from?
One of the few times you would talk to the lender is if you are trying to do a Short Sale, in other words making a low ball offer on the property to gain equity when you re-sell it if the lender agrees to your offer.
John $Cash$ Locke
Bah. Thanks for the help so far. I guess (again) I am a little mixed up in my thinking. But..this is why I am asking questions.
OK. Scenario:
First..by some reasoning..let's say the owner of a house has some judgment on it or liens. Anything that will prevent the owner from tapping into their equity.
Now, let's say by some chance that I come across a house worth 100K and the owner has 50K in equity. How would you deal with this situation in the simplest way? From my understanding, the balance of the mortgage is 50K and this is what the lender will want. If I could pay off the balance, this would leave me with 50K in profit (minus what I give the owner correct?)
How would you handle the situation? (remember..i'm still fresh to the game so keep it as simple as possible if you don't mind).
Again...thanks for the help!
realestateprofit
Common sense would say if there were 50K in equity and the owner cannot get his equity becase of liens or encumbrances, how would you get the house until the liens or encumbrances were taken care of? You are in the same position he is in.
Let me put it this way if you plan on finding properties with a boat load of equity, keep your day job. Are they out there yes but very few and far between.
If you have a ton of dough you can do a deal a day, because CASH is KING and make money doing it.
This is why most of us get in the creative real estate investing business because we use creative methods to purchase houses. Make sense?
John $Cash$ Locke
Bleh. Yes that does make sense. I guess i'm getting a little too ahead of myself. Need to slow down and take another hard look.
Again, I caught myself trying to force incorrect logic (I hate when I do that). As much as I want the "equity" scenario to work, I am starting to see the problems with this strategy. It's really my fault...I've been reading the wrong manuals on how to profit on pre-foreclosures (Most of the scenarios in these books tout the use of the distressed owners equity as source of profit). IF IT SOUNDS TOO GOOD TO BE TRUE...THEN IT PROBABLY IS.
But! Regardless...if I can't come across these types of investments...then I will more likely stick to the simpler things (bird dogging) until I do understand the concepts behind creative financing....
Besides the "Bird Dogging" technique (which i'm more than likely going to use) What types of creative financing techniques do you suggest I learn? Sub-To's? Do you think a strategy like this would be over my head at this point?
Look forward to your response!
Vic
realestateprofit,
Subject To investing is a very simple method of investing. When I started I never read a real estate course, attended a seminar or talked to anyone who did it.
I found a need and filled it. WOW is that tough.
It goes hand in hand with Bird-Dogging, if you find a deal you want then you take it, if not pass it on to another investor and still make money.
You hear me mention 'information overload' from time to time, most new people in this industry aquire it whether they want to or not. The biggest problem with the new person I see.
Here is what I know if you follow what is in my Subject To manual, stick to it you will do deals and make money.
Common sense, seller needs out, I give seller 'U-Haul' money for their equity, which when I am done with my presentation they have none.
The reason the seller does not do it is because they do not know what I know or how to do it.
I sell with No Qualifing to someone who wants ownership and is willing to pay for it. Plenty of these type of buyers out there.
Does this sound like something you would like to learn?
John $Cash$ Locke
OK..here's the deal! I want to be filthy rich!!!! There, I said it. It sounds selfish...but what the hell. One thing my father used to always say was "Just be yourself" well, the desire to succeed and at the same time have enough money to buy North Carolina is "me". The only obstacle lying between me and my goals is the vehicle to take me there.
If the Sub-To's are a good way to get there then i would like more information if it exists. A more detailed summary (short of the course). The thing is....I think i've spent enough money on educating myself on the wrong things. I'm past the "MOVITATIONAL" materials which seems like 75 percent of the REI information world. I'm ready for the cold hard facts..Proven methods...so forth.
I have tracked your progress through this board John and I have to say that among most, you have provided a great deal of advice. You have helped me out tremendously. If you think the Sub-To course is worth the buck fifty, then so be it (i'm going to go out on a limb and trust you here. You've given me no reason not to). Just give me time to sell my kidney first....
By the way, I live in North Carolina. Have you had any successful investments here?
Thanks!
realestateprofit
I have not invested in your area but have invested in GA and FL.
Yours is one of the few areas I go to just to fish and leave investing behind it is so peaceful and quite there.
Well when you get done selling off your organs, put my manual down for your kidney or something you will not be disappointed.
John $Cash$ Locke
Quick question.
Do you go into specifics about how to protect yourself against DOS's in your course? I don't wanna hand over any more body parts!
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I'm signing off Back to the old rat race tomorrow.[ Edited by realestateprofit on Date 01/19/2003 ]
Nevermind. I'll find out shortly.
realestateprofit,
Yes, we talk about the DOS but if I told you on this board how to prevent it I would have to kill you.
John $Cash$ Locke
PS: I will show you how it is done.
Tough guy,
Expect to have me on the phone and in your inbox 24/7.
j/k.
I'm gonna read it and i'll let you know if I have any questions.
Thanks!