Need Help With Potential Short Sale
I need some help from the short sale experts on this opportunity. I found a home that would sell retail for roughly $135,000. The subdivision is selling between $125,000 and $137,500 in the past 12 months.
The current owner has not made a mortgage payment in 8 months, his R/E taxes are unpaid from 2000 forward, and there is a lien from the city for mowing his overgrown grass. The house has been vacant since 12/26/03.
The property has a 1st mortgage of $121,000 and a 2nd mortgage of $15,000. This is straight from both mortgages recorded with the county. The county is owed roughly $5,500 for delinquent taxes.
The house is in rather good condition with the exception of the basement and some minor cosmetic work. Worst case scenario is $10,000 for repairs/cosmetic work.
I am looking for about $25,000 profit on this deal. The lender has not foreclosed yet and the county will not foreclose for taxes owed until year six of delinquency.
I cannot get ahold of the buyer as they have moved to an undisclosed address. Neither the lender (same lender for 1st and 2nd) or neighbors have any contact information.
I am not familiar with short sales or foreclosures whatsoever. I need a little help with what I should do next. I tried to contact the lender, but I am not sure of who I need to talk to or what the conversation needs to sound like. Should I start with the REO department of this lender, what do you suggest?
Also, economically, do these numbers compute?
Thanks for your help in advance.
You can not work a SS without the owner's consent.
Just my own opinion .... I think it is a mistake to evaluate a property first. Unless it is listed in the MLS, this business is about finding owners that are motivated. It is not about finding properties. If owners are motivated or willing to work with you, any property could make you money - whether it is in the war zone or a gated community. So why spend time prequalifing a property, only to find that you can not locate the owner.
But back to your question, you can offer to buy the note from the lenders and then foreclose yourself. I have never done this.
Brenda
It is certainly a good way to find properties by simply driving neighborhoods.
I am curious to how you know the the house needs work and how far the payments are behind if the home is vacant and the homeowner is no where to be found.
There is a great service called www.deadleads.com They are awesome. They give you addresses and phone numbers for every place the owner has ever lived as well as searching drivers licenses, criminal records, and possible relatives with phone numbers, among much other data. It only costs $25 and may be well worth the cost if you can strike a deal.
Looking at the numbers as-is you have an estimated purchase price of $141,500 assuming the owner wants nothing (they certainly shouldn't). Since the numbers are upside down you do have a few options: short sale or buy the mortgages from the bank.
To persue a short sale here is what you need to do:
1. Contact the homeowner and strike a deal.
2. Get authorization to speak with the lender and request their short sale package
3. Get the short sale approved and buy the house for a decent price
4. Fix and sell (or whatever your planned exit strategy is).
Thats it in a nutshell. You may consider buying a course as it will be much more detailed and informational.
Yes myfrogger is right, driving around looking for vacants is good. But then immediately contact the owner. My comments were directed towards how much energy you have put into a house where you can not find the owner. You need to find the owner and see if they want to deal. It does not matter want the lender says, how far behind the payments are, how much you want to make on the deal, how many repairs are needed - if you can not find the owner or the owner does not want to deal.
Brenda