Flipping Listed Properties
OK folks, here is my dillema. I have a listed property in pre-foreclosure. It appraises out to about $249k, listed at $227k. I offered $175k cash and should hear back today, but it's going to sale VERY soon and has been listed twice already with no buyers except for me. I am planning to double-close. My investors are the ones that have the cash, and are the ones that I am going to flip to. Here is my question: Where does the prequalification letter come in? And who do I submit it to? The realtor? I mean, I'm pretty hopeful on this one, simply because of the circumstances. But if I sign a contract to buy with the person being foreclosed on, is their bank going to want a prequal. letter? If they try qualifying me, there is no way that I would pass at all, but my investors will pass just fine. How to I get past this stage? Thanks!
~Ryan
Well, new development on this one... got a call back yesterday, apparently the property already went to auction back on *thursday*, and the balance on the mortgage is around $143k. Couple questions now, if I still wanted to do a double-close:
1. If I were to sign a contract, since the property is now owned by a bank, who would I sign with?
2. Are banks wanting to make a profit still in this case, or just break even?
Just wondering how I would proceed, since this is basically an REO deal now. Thanks!
~Ryan
Hot diggity, almost 100 views and no replies except for my own ramblings... So here's today's update. Apparently, the final balance after auctioneer's costs and whatnot, final, out-the-door break-even price for the bank is $156,900. However, the attorney representing the bank wants me to sign a FAR/BAR contract. So what happens if I write that I'm going to get a loan for 100%, and then when I wholesale it to my investors, the bank is paid the balance in cash. Are they going to raise a stink? And if I write that the closing date is April 29th on the bank contract, but I can close before then with the investor on, say, April 7th, is the bank going to complain about that too? Or are they just wanting to get this sealed up and over with? Do the settlement dates need to be the same???
I'll try to answer this to the best of my knowledge. First, if the bank owns the property now, they are just like any other seller. Make them an offer and see if they accept it. Second, most banks have addendums to the purchase contract. Read them carefully. A note here, most banks require that the buyer (you) or preapproved for a loan or have proof of funds. And finally (I think), most contracts state "on or before" as a closing date. And unless you are obtaining a loan from the bank you has the property, then at closing, it's all cash to the seller, whether you get a loan or write the a check.
Hope this helps.
~Roger
I have a question for you.
Do you have for sure an investor lined up?
If not I might be willing to purchase this property if we can get it right!!!
This leads me to my next question; How much do you need out of this deal?
If you need a cash buyer let me know I see a deal here if you are in need of a buyer.
Mark MBStudios@hotmail.com