OfflineI was going to post this in the Be a Real Estate Millionaire forum but no-one has ever answered any of my posted questions there so forgive me if this is a little out of topic! 
On Page 235 - 2/3 down the page:
It is important to remember that I was not making an offer on the property. Rather, I was making an offer on the lien that was owed on the property. So I was negotiating the purchase of the $145,000 of debt tied to that property. This means that even if I bought the lien for less money, I would still be owed the full amount of the debt. When you buy a lien or a note at a discount, you are still buying it at full face value.
I have read this over and over and I cannot understand what it means?
Can someone help me understand? Thanks!
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Deb
It means that once you buy the lien on the property you are now like the bank for the owner of the property. You essentially own the property the minute the owner stops paying for the mortgage. I other words, the mortgage that owner would pay to the bank now has to be paid to you and you. If this doens't happen then you can foreslose on the property just like the banks would. After the foreclosure is done you own completely the property and you own full value not just what you bought the lien for it.
I was very confused with that one. I can see what you mean and I appreciate your time.
Deb
Can I get a contact list of banks or do I need to use a realtor?
Correct. Dean was buying the mortgage. Then in the future, the owner would make the monthly payment to HIM.
I don't understand how he bought the lien so cheap. Didn't he buy it for like 12K? How do you negotiate a price like this with the lender? I know the lender wants to get this off their books and they are not in business to sell property but to lend money, but that is a helluva deal for an investor.
Nick Walters
Walters Property Investment Group, LLC
And if I recall correctly, it sounded like he was dealing with an institutional lender as well. Hard to get them to discount so awesome negotiating by Dean.
What do you mean by an 'instututional lender? What is the difference?
Deb
Hi Debbie,
An institutional lender are those huge lenders that you see on television advertising their services. Any bank who deals in the issuance of mortgages is considered an "institutional lender" Hope this helps
N
Nick Walters
Walters Property Investment Group, LLC
As Nick has said... I was talking about a bank rather than an individual.
It helps put another small piece of the
Deb
Hi,
I'm looking to invest in a short sale soon. I've read Dean's book and have determined that, based on national and (more importantly) local factors for my area, now would be a good time to buy. We saw a property that's listed for 259K and we don't want to offer nearly that much. Ideally, we'd like to get the home for no more than 225K. However, I'm in the process of making a well-reasoned offer detailing why I'm only offering 225K. I'm definitely thinking outside of the box on this one and planning to talk to the owners first and then to the lender, if possible. I'd like some guidance on strategy so that I can be one of the success stories Dean writes about.
Here's what I've done so far...
After I saw the home, I began the process of getting pre-approved and expect to have what I need from my bank in a day or so. I contacted the listing agent who informed me that his clients (who have moved out of the city and now own a very nice home elsewhere as well) owe much more than the 259K and they have already missed two payments. Additionally, the seller received an offer of 250K that they accepted and the 2ndry lein holder accepted, but the primary lender said no. Rather than wait for the primary lender's counter offer, the first bidder withdrew their offer and went elsewhere. And here we are...
I'd really like to contact the seller/lender and see if we can work something out to prevent them from foreclosing. However, the seller's agent told me that the client signed a seller's agreement, so I'll have to go through agent. Or will I?
So, any advice on next steps for me would be helpful. I want to craft the best low offer possible but, as Dean mentions in his book, make it worth the seller's/lender's while and get the property for a steal.
Please advise.
Thanks for the information. So does that mean that my local credit union is not an "institutional lender"?
Deb