Is Subject To The Best Way To Buy Pre-foreclousre Homes?
What pit falls should I look out for? I have found a great house in foreclosure. outstanding mortgage is 133,000 fair market is 180+. It is vacant, owners are splitting up I think. (Haven't gotten a hold of them) The sale is schedual for Dec 8. I need some ideas. Thanks
get ahold of them and see what they want to do. Call 'em. Knock on some doors.[ Edited by alubeck on Date 10/14/2003 ]
Subject to's protect you in case you can't find a buyer and don't have the money to close on it yourself or find that the debt is higher than what you initially thought.
There is a lot of potential in that deal, find the owners and strike a deal. Just make sure to put your "weasel" clause in the contract in case something falls through. And keep your earnest money deposit low (usually ten bucks) so if they refuse to give you your money back, it won't be a big deal.
Hope this helps.
Dee
I went by the house again. It is vacant. I have sent letters to the address and asked that they be forward. No phone number. Should I be worried? They may be hard to get a hold of. Should I contact the lawyer handling the foreclosure? Thanks
Keep your options open, With regards to sub2, it is one way out of a few, and a good one too. That doesn't mean that it's the ONLY good way.
With regards to finding the new address, the first thing I would do is to send a registered letter, requesting that the post office give you the forwarding address. It only costs a couple of dollars. You will get your letter returned by the post office, and if there's a forwarding address at the post office, they will provide it to you.
Good Luck,
Jeff
Thanks Jeff.... By the way what other ways would you you use.
Thanks
Hi JamesStreet,
Look in the yellow pages or the internet for Private Investigators and ask them to run a "Skip Trace" for you. If you provide them with the name of the people and the address of the property, there is a very good chance that they will track them down for you. They will charge you anywhere from $50 - $200, but if you find the seller and work out a deal, it is money well spent. Best of Success!
BAMZ
Depending on the condition of the house, and repairs needed, if any, this could be a candidate for a short sale. Do you know if there are any other liens? Sub2 is an outstanding method, and my intention earlier was not to discourage you from pursuing this method, I was encouraging you to keep an open mind. When you find the owners, and if they are still in a position to make the decisions on the house, think how happy they will be if you offer them a choice of a couple of options. They might be so concerned about picking which option is best for them, that they forget that they could just say no! Granted no might not be a wise decision, but it happens.
Good luck,
Jeff
Jeff,
Thanks again but I am very unsure of how to work a short sale. Would I have to come up with the money for the whole payoff? I have some cash but not that much. Any thoughts?
Shortsalepro has a short sale primer, I got my short sale info off ebay. There are other sources for info on short sales as well. Probably more info than you can get to know before it would be too late for this property. I apologize for opening up this can of worms on this one. Stick with what you know, and learn what you can to expand your knowledge for the future. I'm far from an expert on short sales, just learning myself, and not really comfortable giving advice on it, and frankly don't even know if this property qualifies. More info would be required. Shortsalepro would probably be one of the best sources of info on that. There is also a short sale forum on this web site. Again please accept my apologies for starting something I wasn't equipped to follow through on.
What does the Subject to Clause actually say? is it that the purchase contract is no good unless I can get financing? Is that not what's called the financing contingency?, which almost all contracts have anyway?. Could someone elaborate on exactly what the subject to clause does for me as the buyer, and whether its should be added as an Exhibit or amendment to the purchase contract
mortgageman,
It's not a "subject to clause", they are referring to the "subject to" method of investing.
Check out the forum dedicated to it to learn more.
Roger
mortgageman,
Here is a link to explain the differences.
http://www.thecreativeinvestor.com/modules.php?op=modload&name=Forum&file=viewtopic&topic=11873&forum=34
And like Roger recommends, check out the forum.
Best of luck
John (LV)
James,
I am just starting in this crazy business myself and am working pre forclosures also, the neatest thing about a vacant home and not being able to find them easily is that no one else can either. Sundays are the best time to check these out the owners may be there cleaning our moving a few things left over I have found a couple I am working on by doing that or knock on doors up and down the street, some one usually knows where they went or has a phone number or knows the nabor that does know and usually you get good info on the naborhood and the house also.
Look up the last name in the phone book and call if there aren't a ton of them, if they ask why just tell them you want to buy their home and ask if they could relay your number.
Darwin (NM)
Thanks everyone for the help.....
Jeff no biggy every little bit of info helps. I am learning something new every day. Will check into short sale info but will take some time. Still trying to master Subject to info. (By the way I suggest you you like to learn that you get John Locke's book.... Has helped me a ton)
Thanks again to everyone....
Shoot me a Private message with the owner names and the property address. I'll see what I can find for you. I have some sources that I have wanted to check out.