What NOT To Do. (Newbies DO NOT READ)
Before you get the home buyers signature on a contract agreeing to sell you a house for what's owed on it.
You make sure, that you do a title search,
Do spend countless hours dealing with 1st lien holders and 2nd lien holders,
Do a thorough property inspection, Bring out a contractor to estimate repairs.
Pay an application fee to your lendor and line up bank financing. Talk to the owner for the entire week, keeping her informed of your daily progress.
If you do this,
I guarantee you that grief will come your way. Do not do a title search, Do not spend a dime on anything, nor a moment of your valuable time, Until YOU HAVE FULL CONTROL OVER THE DEAL. EVEN IF SOMEONES GIVING YOU THE HOUSE FOR COST, YOU CAN'T AFFORD TO DO THIS.
SIGN THE CONTRACT FOR THE FREE HOUSE FIRST, THEN FIGURE OUT IF IT WILL WORK.
btw- I'm not going to tell anyone How I figured this out either. 
G [ Edited by GWmson on Date 08/10/2003 ]
can you please make things a little clearer. what do you mean about sign contract for the free house.
if it is not asking too much, can you please lay-out (number) steps on exactly what to do. right after you are interested in property.
thank you
Sure.
1. Locate Distressed Seller
2. Prescreen them.
3. Ask will you sell me your house for what you owe on it?
4. SIGN AGREEMENT SAYING THAT, SUBTO.
5. Then and only then figure out if its something you want to get involved in.
Keep in mind, your contract is yours, you can break it, they can't. Therefore, there's no downside to getting a sales agreement -BEFORE- you do any of the above listed things that I state NOT to do.
G'Luck,
G
WTF happened to the follow up posts?
It looks like all the post from the 13th are gone and maybe some from the 14th.
Not sure what happened.
GWmson,
I hope you are being sarcastic!
If you have the owners sign the house over to you and you decide not to go through with the contract for whatever reason ... You are Keeping the Homeowners from finding a viable solution for fixing their problems since they are RELYING ON YOU!
I have run across many homeowners that say they are working with an investor and it's "all worked out". I then find out that some inexperienced investor got them to "sign the contract" but plan on letting the house go to foreclosure because they couldn't make the deal work.
Whereas, I could have!
Hope This Helps,
Mrs. Meltzer
Nope not at all.
You should be able to ascertain from the information the owner gives if its a doable deal. If so, then sign a contract, subto. Course you may or may not have realized it yet, but not all of these homeowners are exactly 100% forthcoming.
But dont spend any money on title searches, inspections, financing, etc. nor any real time on this deal unless the owner is willing to sign a contract commiting to sell it for the agreed upon price up front.
Point being, don't let the OWNER control the deal. You want to negotiate from a position of strength, if you've invested $500+ dollars in a deal and a week or more of your time, prior to getting a contract signed, then they can and often will try to manipulate you (renegotiate) since your already commited to the deal.
Not sure why thats so hard to understand.
G
It sounds like you're saying to sign the seller to the contract, subject to things like a clear title, etc, and other things the owner has stated being true. Sounds like a good way to work on the details with at least knowing that the deal is yours to work on. The seller shouldn't have to worry about you cancelling the deal if what he has said is true.
Exactly TL.
I'm not saying grab a deed and hold it hostage for 3 months. Grab the deed, double check the numbers and the condition of the property and do the deal. Or dont do the deal and give it back to the owner. Pretty simple. Usually you know in 3 days to a week.
Whats the point of holding on to something thats of no value to you? Besides that, we might be keeping Mrs Meltzer from getting involved in a humdinger of a deal and saving these innocent people from bad men like me.
G
As Ronald Reagen once said,
"Trust, but verify"
[ Edited by GWmson on Date 08/16/2003 ]
GWmson, I take back what I said. You aren't a bad man!
I mistook you for a "wholesaler" that gets a homeowner to "sign the deed' and lets it go to foreclosure while trying to find an investor.
LOL! Owners in foreclosure that tell the truth! Hahaha AHhah. If they all told the truth, my job would be boring!
The deal I'm working on now. Owner told me flat out he has $40,000 in equity. After adding mortgage balance and repairs, it's closer to $4000.
The best is the owner that "forgot" to let me know about his $100,000 in IRS tax liens.
No, wait! I love the one where the guy was willing to sell me his house ... until I found out HE DIDN'T OWN IT!
Makes the research part more fun 'cause I'm always amused by what I find.
Mrs. Meltzer