Pre-foreclosure: Has Anyone Really Done It?
Is there anyone out there who has actually purchased a home directly from the owner left him/her some moving expenses money and walked away with a nice profit after resale. If there is someone who has experienced this type of transaction please tell me what hardmoney lenders out there you are using or how you are buying out the distressed owner in "10 days".
I have bought 2 homes and 1 duplex in the last 3 months here in los angeles. They were all in foreclosure process. All with substantial profit. Well 2 were short sells to make a profit. You can do it, but you have to do your marketing or it will never happen.[ Edited by HomeSelling on Date 07/03/2004 ]
I have done it many times in the past mostly in the greater Los Angeles Area. I have had both good and bad experiences. But I operated from an office on Sunset Blvd. that was a mecca in its time for picture people trying to buy their first house, or persons in trouble who were reccomended in by their broker, attorney or ex wife. The essence of the act is having a standby layoff. That we had as many many small investors were waiting in the wings for properties and profits.
It was our pride and joy that all persons touched by our magic fingers came away with a solved problem and a much improved attitude from when we first met them ringing their hands and doing mea culpas. We actualy ended up with a standby apartment house in West Hollywood where we implanted many of those whose equities were but sparse. As a matter of fact one local wag, said we did more placements then Central Casting. It was a fun time.
I am very busy now with steel containers but I still do the odd one mostly in the Valley.
The present time beginning of an inflationary trend is accelerating the amount of properties that go all the way thru NOD to actual Notice of Trustees Sale. Watch your statistics on actual completed foreclosure sales it is an imperfect number. Most are cured or corrected by persons such as you and me on TCI.
I looked at one this afternoon in Sherman Oaks up in the hills. A phony sale at $1,220,455 was set up on 11/25/2002. Two loans were borrowed
on 3/14/2003 from a local bank. The first loan is $900,000 finaly now in foreclosure. The second loan from the same bank recorded concurently the same day was for $200,000. My best appraisal is about $700,000 and I am discounting the fact that you enter on a level which consists of the bedrooms and then you trudge down a stairway to the kitchen, living room etc. Small matter. It is boarded up and the neighbors are hostile. The bank waited until 5/10/2004 to file the NOD.
My line of approach to the bank is through their attorney who is disgusted and beginning to look at the loan officer, the appraiser and the executive who steamed this little goody through.
My plan to present to the bank a savior who will take over this monster and return it to the area of habitable highly overpriced housing. My offer about $600,000 with their furnishing of about $115,000 to renovate this doggy into a thing of beauty and bad taste which will sell at about $865,000 to $866,000.
I have located the Scamer who did this naughty and can obtain his releases and blessings. He is now a member of the leading AfricanBaptist Church and can be seen in the second row of a really swinging Choir. The rest is in Deos Manos.
The bank can of course cover the loss by utilization of sliding interest rates and the division of risk between a lst and second written at varying interest rates.
All of which begin upon completion of the fitting of the emperors new clothes and the subsequent customized marketing of the property.
Music, exterior lights, parking service Coctails at Sun set, . A bad Calif Champagne and the neighbors full of smart remarks and lots of leads to would be buyers. The small fake elegant bit player with the shiny teeth and brittle blond hair will serve little dead fish on www.crackers.The arch in her back so pronounced you can hear her ribs crack. You know the usual.
Cheers Lucius 8-)
I really appreciate everyone's comments but my I really need to find a hardmoney lender quickly. I've started sending letters and I've received a couple of phone calls but if I actually get someone willing to sell I need a lender who can close quickly. Anyone know a lender? Please any help will be greatly appreciated. :-(
You should look in your local Nickel Ads. There a lot of people out there who do this. Better yet, join your local real estate investors association. There are always people there who can lend you money or know who can.
Knowing how to utilize a hard money lender is as much an art as locating potential acquisitions. They aren't all the same... and their criteria might change from deal to deal.
For example, will your hard money lender make a loan based upon the actual, as-is value, or on the sales price?
It can make quite a difference.
In my experience, most HMLs will loan up to 65% or 70% of the property's as-is FMV.... or the contract sales price, whichever is less... and don't much care about the 'after repaired value'
So, is your question REALLY "Has anyone successfully bought a pre-foreclosure property?", or is it, "Does anybody know of a hard money lender I could use?"?
you can try a collateral lender like eastern savings bank, or www.hardmoneydirect.com, are you looking for 100% financing? cause you probably won't get it from hard money lenders.... :-?
My experience was extremely profitable but it was a great deal of work and drama because there was a bankruptcy and a foreclosure going on. There was no external funding used.
Has anyone out there picked up the phone and actually called up a property owner in preforeclosure. I actually tried this out last week and it kinda went like I expected. 50% hanged up 25% told me they had it under control 20% "no one here by that name" and 5% listend and told me to send them information. Any feed back will be greatly appreciated. By the way is this illegal in any way?
ruben:
If you mean buying properties in foreclosure or pre-foreclosure, no it's not illegal.
If you mean telephone calling people for unsolicited prospecting, you might be up against a Do Not Call/telemarketing problem.
Plus, you've already learned a lesson in foreclosure psychology: most people are in deeeeeeep denial when it comes to this. They think there's always a way out that involves them getting some kind of money or not damaging their credit--right up until the sheriff is escorting them and their stuff to the curb.
Andy
Thanks for your reply Andy. Have you ever made phone calls or purchased a property by calling people directly?
Why are you calling them and asking them if they want you to send them information? I think you are doing this in the wrong order, the whole point of sending information is to receive the phone call, and the whole point of receiving the phone call is getting the appointment. You are working backwards. If 5% listen, then set an appointment, don't mail information.
Quote:
On 2004-09-07 20:41, ruben wrote:
Thanks for your reply Andy. Have you ever made phone calls or purchased a property by calling people directly?
I see everybody mentioning finding pre-forclosures, what is the procedure? Anybody have any experience doing this in Ontario?
Your absolutely correct Ruman. Thanks for your response. Next week I'm going to start posting up signs. But for some reason I feel that dealing with people directly by calling them is better than waiting for someone to call you. I spoke to someone who did a mailing and is yet to get one call. He spent about a thousand dollars but I told him that all it takes is one call one deal and it more than makes up for what he paid to advertise. Has anyone had any luck with signs?
Interesting. You started out looking for a hard money lender ASAP, but now you seem to be articulating the beginnings of a strategy, which is far more important. Find a copy of Conti and Finkels "Big Money in Foreclosures" book, lots of good ideas there. Look at the Sub2 forum here too; maybe you could swing this without borrowing hard money...or much money at all.
ruben Brooklyn is a veery competitive market im tried the past 3 month and got ONE good deal ,only to have it killed by the sellers aterny