Need 1st Step Help
Hi, I have gotten the local list of forclosure proceedings that are scheduled for December.
I have driven by these houses and will be going to the deed office to pull lein info today.
If the leins are acceptable to me what is the first step I take .... contacting the owners ? contacting the banks ?
thanks for your help
In my opinion the best beginning is to decide what you want at the end? buy-and-rent? lease-option? sell wholesale? Rehab and sell?
Next figure out how much money you can get to fund your purchases (yes it does take money). The main expenses you'll have are cash to seller, repairs, back-payments, and holding costs.
Next research your market. How much do homes go for at auction? Before the sale? How much to rehab a beat up house in the area?
Next Understand your local foreclosure law, generally the civil code. Know the do's and don'ts. I'm in California and our civil code is very specific as to what you can and can't do. And the penalties are huge.
Now, develop a system to analyze the value of properties both before and at the sale. The number you end up with will be your MAO (maximum allowable offer) or Maximum Bid Price.
There's more but you probably see you should get some training before diving into foreclosures. Good luck!
riedel63,
I was up in Beloit just a few weeks back looking at a commercial piece downtown. I took a pass but it seems like a nice town. Interesting economy looks like there should be oportunities.
That said what you are looking to do is buy a bargain. A bargain is 70% to 80% of retail value. If the leins are more than the wholesale value of the house the people you want to talk to are the leinholders. If they are less then you want to talk to the homeowner.
If the leins are more than 80% of value then you want to be talking to the leinholders about a discount. If the homeowner has 20 to 30% equity then you want to talk to them about buying that equity.
My suggestion is to reverse the process. Contact owners first, then drive by houses and pull lien info. If you start by finding willing sellers, you have more options available.
If you find the perfect house with an unwilling buyer, your only option is to buy at the sale.
I wasted a lot of time in my early days agaonizing over whether the house was right before ever contacting the owner-- big waste o' time 8-)