HELP-Want To Do First Deal Preforeclosure
First let me say this site is great! I need advice on how to do first deal on pre-foreclosure. A seller wants to sell his house before the sheriff sell of March 22. He's going to try to postpone the date as the advise from his lawyer. Possibly thinking about filing Bankruptcy or selling. I want to buy the house subject to and he seemed okay with that if he sells. Where should I began? How do I get the information needed to know how much is needed to pay off the arrearage? Should I call the mortgage company or the lawyer? Would they give that information to me?
The house appraises for 165K
1st mortgage is 83K
2nd mortgage is 14K
I'm a newbie investor and is a little nervous. Any advice or help would be greatly appreciated! 
First you could go about this a couple different ways. If the attorney already has this information then utilize his connections Make sure the payoff is up to the date of the closing.
If not then you need to get the owner to sign a General Authorization to release all information regarding the property. Once you have this you simply email or fax it to the mortgage company and then they will release the information to you.
The bank will be real reluctant to do a short sale because of how close it is the sheriff sale. They're already incurred all the costs associated with the forecloseure process...
You option...Pay it off before the sale.
That's about your best bet. Unless the seller is really going to file bankrupcy anyway, then you may be able to do a Short Sale. But I can tell you it will likely be in litigation for 3-5 months before you can do the deal.
WHAT IS THE CONDITION OF THE HOUSE? If it's a wreck...
Sign a purchase agreement...flip it for a fast 5K to a rehabber( backup plan: Find a Hard money lender, close on it yourself)
If it's in good shape...
Sign a purchase agreement, give the seller some $ for the equity (a thousand or three should do it) , flip it, or close with hard money and refinance it.
Hope this is helpful.
Sam
I'm sorry, you said take it Sub to, not SS. Mea culpa.
How far behind are the payments? Will the bank reinstate the mtg at this point? I don't think they have to... You should probably get Authorization to release information form signed by seller and talk with the bank to see if they will even reinstate at this point.
As far as getting money...
You could use- credit card, hard money, line of credit on your own house, ,rob a bank, er...find a buyer to give a large downpayment (may be tough in that amount of time) then sell immediatly to them (either on a flip or subto).
I think it's inportant to ask...
What is the condition of the house?
If it's in good shape, the above works. If it's in poor shape, see my first post
Don't be nervous...you're building youself up to fail if you do that... Be confident-that you will (no matter what the outcome) learn something from this experience...
Sam
Sounds like a sweet deal. Be sure to do a title search and or buy insurance. What is your intent when you buy the property. Will you sell or lease or l/o. Like stated above get a letter from the owners re mortgage authorization. Get it under contract too with the seller first. No sense in doing all this just to find that they sold to someone else or something. Be sure to ask more questions on this forum if you need more help.
Good LUCK and Thank You
Hope this helps some
Ted Jr
Thanks for all the advice guys. The seller has filed bankruptcy before and said he's very far behind. I think this one may just be a learning experience but I will pursue further. There is 10K worth of fix up. The most important thing I need to do right now is see if the bank will reinstate the loan. There is a first and second mortgage. The second mortgage is fine. The first is the one with the problem. Is this authorization form just a letter? What does it look like?
Oh and my thoughts were to rehab it and sell it...
Thanks for all the help and confidence.