Finding Commercial Foreclosures!
I work for a small commercial investments firm that specializes in undervalued or underperforming assets and am currently looking for foreclosed Commercial properties.
I have began a small database of banks in the area and thought about cold-calling to find out if any of these banks may have any.
Does anyone have any other ideas on how to track these down?
Thanks
NickJ
What was your career path into acquisitions? Iam currently working with one of the BIG CRbrokerage firms, and down the road (sooner rather then later) am looking to get into a real estate firm and less a sales firm. I would love to do acquisitions, hunting out deals, especially underperorming add value deals. For your questiion, may also want to check with some local appraisers, bank often send them out to get a fair market value on their asset before they decide to price it, so you might be able to steal a deal there, at the very least you be able to know which properties are in receivership. As well appraisers are a process in refinancing, so if the owner is looking to pull out some quick equity for personnel reasons(divorce,sickness etc.), you might be able to give him a ring and find a motivated seller on your hands. Working in CRbrokerage i have found that owners think they are "saving" money by bypassing having their property listed. You may want to find properties in your area that "look" underperforming and call the owners directly. These properties are not foreclosures, but looking through sales figures in my area, some people are getting STEALS that would beat any foreclosure.
Some good advice.....
I began to work for a small investments firm as the marketing manager and gradually transitioned within the company.
Nick -
Look at the local housing authority - sometimes they have lists of plaintiffs which are typically burnt out landlords that you can contact directly and inform that you would like to buy their underperforming property.
Also, health board, municipal tax boards, city code enforcement, DEA repos (sometimes these are the best properties - druglords live like Al Pacino), etc.
A little used source is the US Bankruptcy Court.
I bought a 13 unit (5 Duplexes and 1 tri-plex) valued at $1.2Mm for $700k. Later after remodeling We sold 10 units for $1.2 MM and still have the 3 units.
there was only 2 of us bidding on these units with no else around.
Good Luck,
Robert
[addsig]
How do you find properties thru the US courts? Large commercial and MF properties
In my county you can record a memorandum of option . This will prevent anyone else from purchasing from under you since it creates a cloud on title.
You are shopping with the wrong lenders. There are a few lenders who do non recourse and no pre-payment penalties based on the cash flows of the properties. You would need a credit score of >640 but since non recourse, your companies credit rating will not be an issue. Your management experience will be a bigger issue if any.
Good Luck,
Robert
[addsig]
Thanks for the information, Robert. My credit score is over 640. However, my corporation has only been in existence for a little OVER 1 year. Robert, could you provide me with the lenders that would work with my situation. I would greatly appreciate it. Thanks again!
Well, tricia the short answer is this.
All contracts (except for personal service contracts) are assignable unless they specifically prohibit assignment. Regardless of what the bank says in advance if your buyer shows up at closing with your contract properly assigned the bank and the title company are going to close the transaction.
We frequently make offers in the name of trusts, land trusts. At closing we put the name of the trustee for the trust on the documents.
This only works with hard money and or cash but it does work and we have used this technique many times.
[addsig]
seems to me if you are a trustee,you might be able to write the contract ,your name trustee and/or assigns selling the land trust to buyer.
1. Make offer in the name of an LLC. I often include the property address in the name of the LLC.
2. Once the offer is accepted, create the LLC. Check with an attorney and/or your Department of State regarding the procedures and costs for forming an LLC.
3. Assign/sell your membership (ownership) in the LLC to a buyer once you receive your assignment fee. Check with an attorney regarding the documents required to assign/sell an LLC.
4. Collect your assignment fee in the form of cash or a check made out to the LLC and endorsed over to you by your buyer (the new owner of the LLC).
5. Celebrate! Congratulations on a job well done.
I learned this from Steve. It worked for me.
Assigning this ownership of the LLC, can this be done when a buyer is going through conventional financing or do they have to pay with cash or hard money. Or else, how can you get your assignment fee?
You can also get the people that you would typically assign the contract to, to sign a contract like a realtors buyers agency contract that states that any property that they purchase that was sent by you they will pay you a certain amout or fee. Have your people get the contract signed before letting them know about the proposed property. Yes you could get screwed but typically serious investors will try to uphold there reputation.
Eric Medemar
TheMillionairesBlog
I love getting assignments. I have a bird dog that regularly ties up undervalued props and then offers them to a select group of investors - myself included. He has the time to drive around all day and I am stuck in an office writing loans.
I got a 3-unit assigned tome for $5K from him. I paid $199, put $16 into it and the market value today is $315. Totally worth the $5 if you ask me.
Busy investors are the market for assignments. Find them at your REIA.