Is Bankruptcy The End?
Hello.
I actively follow homeowners in default, seeing many of them file bankruptcy. I stop contacting them when bankruptcy is filed. I thought once it goes to the bankruptcy, it is basically untouchable. It’s the end. It’s like death.
But lately, I started to wander, if I was wrong on this…
Is there anyone here, who keeps chasing them even if they file bankruptcy? Or, is everybody doing pretty much the same thing as me, which is to stop chasing them?
Thanks in advance.
As it is possible to sell a home out of bankruptcy (CH13), it follows that buying one out of BR is also possible. However, if the owner is far behind in payments, it may be tough to buy at a satisfactory price point.
It can be done, but requires thorough research and lots of patience. It's probably easier to get houses before they go into BR.
Yes, but you have to get the courts permission. I have known of a couple of investors that this is all they do. You may have to do some homework and maybe talk to a bankruptcy attorney, but it can and has been done
I bought a preforeclosure last year where the owner was in bankruptcy. I worked with the BK attorney so the sale could take place. The bankruptcy court did give permission for the sale.
Bankruptcy is just a stay of execution. It only delays the sale, and will eventually be lifted and the assets (house) sold. So if you can get their first and work with the BK attorney, you might be able to work somehting out. If they are behind on their mortgage, you can bet that the bank is working to get the BK lifted so they can foreclose on the house and have the trustee sale. It happens a lot when you buy foreclosures that the owners file BK right before the sale thinking it will save their house. It ruins their credit, and only buys them a little time. If anyone is going into foreclosure, the best thing to do is work with the bank to buy yourself time, come up with the money - or if you can't, sell the house fast and get your finances back in line. I do that some, but I am planning on expanding that art of my business a lot next year to help people be realistic about their financial position and then live a lifestyle that fits that while the come up with a plan to increase their means.
joemac1241,
"So if you can get their first and work with the BK attorney, you might be able to work somehting out."
Are BK attorneys cooperative to investors who offer less than market value? I was just assuming they would advise their client (homeowner) that price is too low. I was assuming the same about the BK Trustee too. If the house is in reasonable condition, wouldn't it difficult for us to get a decent deal from BK attorney & trustee?
I am curious...are you thinking about doing foreclosure consultant kind of work?
Thanks.
whyK-CA
I would recommend a two pronged attack.
A blanket mailer to all of the NODs. They are cheap and if you hit 1-2 per year from this you'll get a great return.
Then for specific properties you like (#s look good, they responded to a mailer, or any other reason) pay them a visit. Be very careful when you do this though, there are plenty of horror stories out there and the chances are you are not the first person to knock on their door to buy their house.
-Joe
Another useful technique is calling on the telephone. Somtimes telephone numbers are hard to track down but I think this approach is the most efficient.
I was thinking that a two pronged approach might be the answer. I also know that I'm probably not going to be the first prospector at their door. I'm just trying to avoid in "major" mistakes when approaching potential clients. I also use a web-service to give me addresses, but from what I understand they tend to be about two weeks behind since they have to compile the information. I suppose then my strategey will be to go to the records office myself, compile my own info, bulk mail everyone on the list, and personally visit the few that look to have great potential. One of my problems is that I live in a very hot market(Orange County, CA) and I think every other person I see is trying to do the same thing I am.
The fun, the excitment, the...frustration of REI! lol
Michael J