Pre foreclosures

[Craig 0]

Has anyone figured out how to LEASE OPTION a pre foreclosure? For example with the amount of defaults I am hearing the banks are agreeing to waving a few payments for the time if you can agree to stay current?

[Doug Pretorius (ON) 9]

My very first deal was a lease option on a pre-preforeclosure. He wasn't late yet but wasn't planning on paying the following month. I went into the bank and told them I would be the one paying them from then on, they thought I was crazy, but were more than happy to take my money.

 

So for your situation if the bank agrees to move the late/missed payment(s) plus interest to the backend of the mortgage while you pick up the tab from now on, then I don't see why this wouldn't work. Just make sure you protect yourself from a flaky seller.

[MichaelC 160]

Can't say I've had any luck with such a scenario, Craig. I have always found banks and lenders to be rather adamant about being paid and the loan being brought current. So when I find a homeowner willing to do a lease purchase but behind, say, three payments and $5K, I don't see this as being compatible to my business model. That $5K needs to come from somewhere. It ain't coming out of my pocket, and if I collect it from a t/b and then pass it along to the bank to bring the loan current, what's left for me?

 

 

PS: Doug, what is that spooky looking thing in your new avatar?

[#1investor_cream 5]

Hey Doug Did you have authorization to speak with the bank...I believe they don't speak with investors unless they have a authorized agreement between you and the Home Owner

that you can do business with them..

I have never thought of doing a CA on a property that is in Pre-Foreclosure that is pretty Creative

[Adam King (MI) 1]

Well, it's obvious you fellas haven't heard of the new four letter curse word: MICHIGAN Okay, so there's more letters but who's counting?

 

Craig,

To answer your question, YES YES YES YES YES! YES you can do an SLO or CA ALL DAY LONG on a pre-foreclosure. All you have to do is bring the payments current, or; YES have the seller talk to loss mitigation and TELL THEM they have a renter and need to push the late payments to the back of the loan. THEY WILL work with you! And yes, if you do it you will need an authorization to release information so you can call and talk to them yourself. Here's something all you may not see in your pretty little "appreciating" worlds ; banks are DUMPING properties to other banks RIGHT BEFORE redemption. I would be pissed if they did this to me (as a bank buying), but they offer a bunch of "okay" properties to the new bank in bulk as long as they take a couple of loser properties. Then when you call the bank you can be like; dude, do you know what they did to you guys man? You don't want this property!

 

I have pulled out several homes from foreclosure simply by using the CA. I just give half of my assignment (consideration paid down) from the buyer to the seller. I tell the seller to return beer bottles, ask a neighbor or whatever they need to do to come up with the rest of the back payments. It's very simple and it works.

Hope that helps,

Adam

[#1investor_cream 5]

Well, it's obvious you fellas haven't heard of the new four letter curse word: MICHIGAN Okay, so there's more letters but who's counting?

 

Craig,

To answer your question, YES YES YES YES YES! YES you can do an SLO or CA ALL DAY LONG on a pre-foreclosure. All you have to do is bring the payments current, or; YES have the seller talk to loss mitigation and TELL THEM they have a renter and need to push the late payments to the back of the loan. THEY WILL work with you! And yes, if you do it you will need an authorization to release information so you can call and talk to them yourself. Here's something all you may not see in your pretty little "appreciating" worlds ; banks are DUMPING properties to other banks RIGHT BEFORE redemption. I would be pissed if they did this to me (as a bank buying), but they offer a bunch of "okay" properties to the new bank in bulk as long as they take a couple of loser properties. Then when you call the bank you can be like; dude, do you know what they did to you guys man? You don't want this property!

 

I have pulled out several homes from foreclosure simply by using the CA. I just give half of my assignment (consideration paid down) from the buyer to the seller. I tell the seller to return beer bottles, ask a neighbor or whatever they need to do to come up with the rest of the back payments. It's very simple and it works.

Hope that helps,

Adam

 

 

Hey Adam,

What is the point of doing a CA on a pre-foreclosure when you can simply do a Short-sale, the profit is larger!

[Doug Pretorius (ON) 9]

Doug, what is that spooky looking thing in your new avatar?

That nasty little thing is a seriously pissed off cat!

 

Doug Did you have authorization to speak with the bank...I believe they don't speak with investors unless they have a authorized agreement between you and the Home Owner

that you can do business with them..

The owner and I went in together. I don't remember the bank asking for any kind of written authorization. Maybe I was just lucky with the person we talked to. Like I said they didn't care who's money it was as long as it kept coming in every month.

[Jonathan RexfordFL 8]

Hey Craig,

 

Yes it can be done. With out going into all the HYPE here is how I do it with Sub2 properties and it will work the same way with Lease Options.

 

Get the authorization to release and fax it to the lender.

 

If there is more than one mortgage you will need both. If you can get a 3 way into the lender (loss Mitt) department and it will save some time.

 

Here is where you will need the Seller to work with you just as you do with Short Sales etc.

 

Get a financial package from the lender to do a work out plan.

 

It will be the same basic package as a Short Sale but what you are going to do is to use the Financial Statement to provide a Positive Cashflow to do a workout.

 

If the loan is longer than 24 months they will more than likely place it on the back of the loan. If not they will do a work out with the payments.

 

But it does take more work. It may or may not be worth it.

[Adam King (MI) 1]

Hey Adam,

What is the point of doing a CA on a pre-foreclosure when you can simply do a Short-sale, the profit is larger!

 

Because short sales suck. Here's another question, why do a short sale when you can just go buy an REO at auction? Or make a low offer using cash? Same reason, everyone talks short sales but no one comes out of them with any hair left.

 

Another answer? I do cash deals all the time, but why throw away properties with no equity when you can still help the seller? Again, you try a short sale on everything instead of simply doing a few easy deals, you'll lose you MIND!

 

And the final answer? Because CAs are the easiest thing to do on the planet WITHOUT your own money, credit or becoming a superstar in using other people's money. I.e. everyone can do it. And you're not on the hook for the mortgage payment if you don't have cash to hold.

Regards,

Adam

[Jonathan RexfordFL 8]

Short Sales Suck ON SALE AT THE NEAREST GURU SHOP FOR $1,497.00 We will offer 5 Day training for additional $2,497.00.

 

Adam you crack me up sometimes.

 

Short Sales don't suck. Sure they are time consuming and you do know what you have to do. The reason most people fail at them is that they did not have a short sale case in the 1st place.

 

If you approach a short sale with the idea of having success in mind and setting it up that way based on good business practices then it can be successful.

 

Choosing it as standard business model will drive you broke. Just like CA transcations is not a stand alone business. It can't be to sustain itself.

 

Here is my Short Sale model. It has taken a few years for me to adopt it from hearing all the crap out there. But in short. It has to have a reason to be shorted.

 

Needs Work

High Second balance

1st LTV shall not exceed 78% of value to the As is Value

 

If it is a pretty house that needs know work and is one of those 80/20 loans that just had the ARM broken. These are not good short sale deals. It is best to let them go to the bank.

 

The arrearage will not be placed on back of the loan because its a new loan.

The only plan would be to work out a payment plan. Most I have ever gotten was 14 months.

 

Your contribution would be usually about 30-40% of the arrearage.

 

The reason I hate Short Sale as a business model is that you are dealing with a non motivated individual. Some REP at the bank.

[#1investor_cream 5]

Short Sales are easy and fun, My opinion! If you know how to work with the banks. The homeowner will do anything for you as long as they see you care about helping there situation. I don't use any money of my own or credit. Hard Or PrivateMoney And I have it sold before I even Buy the property off of the bank. Our deal right now is going real smooth, HomeOwner owes 400k I negotiated with the bank for 127k and they took my offer. My package is set-up so you can't loose. It's all about working with the bank. I will earn about 50k on this deal or MORE ! I have 3 more to do this week!

MSI- Multiple. Streams. of Income.

I will do a CA and a Short Sale line-up in the same day!

1 out 7 properties are going into Foreclosure! In Dade & Broward Counties, That leaves a lot of room to play in.

Short Sales take up to 2weeks - 8Months.. CA's are moving like Flap-Jacks and Hot-Cakes!

So do both my 2cents!

[MichaelC 160]

Short Sales Suck ON SALE AT THE NEAREST GURU SHOP FOR $1,497.00 We will offer 5 Day training for additional $2,497.00.

If it includes 12 CD's I'm in!

I'm not a short sale aficionado myself. Too much work, too much time, too frustrating as you deal with a series of pencil pushers who are fearful of making a decision that their boss may question.

[Jonathan RexfordFL 8]

Well it is not a business model that I do. The way I work it is that if it qualifies to my standards and seller is willing to work with me then I will approach the deal. I have it more point and click these days. But I won't go back to a deal until I get FULL packages from SELLER.

[megabucks41 0]

Well, I must give credit. where credit is due. I started my son on this Real Estate investing thing and it was going good not great just good, doing CA's the market was a sellers then we went into doing pure options, found out that some people can't sell their homes because there is so much crap in the home that the new buyers can't see past the seller's family pictures. So things started to turn into the buyers market CA's went on a stand still along with all other methods of moving a property it seemed. Then my son told me about something called a short sale, and like it has been already stated the process seems so darn long but the profit was so huge it seem like this was great. Bank doesn't want the property owner can't afford it. Hell somebody needs to step up and turn a lemon into lemonade, why not us the investors or rookie investor like I call myself.

 

What's all this stuff about: short sales as a business, CA's, Pure Option's or anyother methods, Please tell me that you all are not going to turn the art of being an investor into a one method type business back room office type business?

 

Hell I fell in love with the words real estate investor because of the freedom and amount of methods an investor used just to make a buck and keep away from the job world.

 

So my point being that there is no one method of investing, it all works if you work.

[#1investor_cream 5]

I agree 100%.. Also MIND-SET when I first started this business, I was not trained to be my own boss! I had no idea how to train myself into geting out of the MIND-SET of a Employee.. So thanks for pushing me so Hard DAD ! LOL

He Trained me how to work my mind. Instead Of my BAck! I love the Freedom of being a Real Estate Investor

We have so many options to make money, in any Market- Buyers- Or- Sellers... Thanks again to everybody Here and my dad, at 18yrs young I did not know how to Run A business. Now As I devolped, I have my own business !

And my Word Is My Wand ! Anything I want I command! Cool Stuff. Real Estate Investing man, I love when people ask me what I do for a Living..

Dad I just Picked up Another Lead for SS-