OfflineI need help with trying to take advantage of this opportunity. I haven't done a deal yet and have been struggling to try and do my first deal. I have a friend who is having their house foreclosed on they are moving out today and would like some direction on where to start to get this property locked up and if i can post it on this site to have someone buy. I am lost here and cannot seem to find the answers i am looking for.
thank you
Mike.
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First things first. When is the auction date? Selling to a fix/flipper:
You need to find out what the total pay off amount is. Your friend can get this info from his lender. Mortgage payoff amount PLUS any legal and late fee associated with the foreclosure. This is the amount you can buy the house for.
You need to find out what this property will sell for nicely remodeled (ARV)
You need to find out what the rehab costs will be.
With this information you will know whether this property has enough of a spread to make it worth while to offer on.
For a landlord buyer or buy/hold situation you still need all the above info. You also need to find out how much money it will take to CURE the foreclosure. That is to bring your friends mortgage current and stop the foreclosure. From there you can determine if a lease/option will work. What do properties rent for in the area? There any many thing you can do but FIRST you must make sure the numbers will work for a fix/flip or a rental.
After you have this info THEN worry about the next steps. As far as posting your deal on this site looking for a buyer your chances are very slim. You need a list of real cash buyers in your local market place.
This will be a great learning experience for you. It may not be a deal but you will learn a lot from taking action and trying to do the deal!! It might be a great deal!
Good Luck,
Michael
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
Thank you so much for the quick response and for all the information.
Time is a factor and you might want to get an idea of how much might be available. You want to see how aggressive the lender is in pursuing foreclosures. How are they handling seriously delinquent loans (90+ days in default). What are the average number of days it takes them to get a foreclosure to sale. Do they owe more than the property is worth? What is the lenders policy on short sales? Is there a second mortgage that could be discounted to create a spread? Don't know what state you are in so I don't know if it would be a judicial or non-judicial foreclosure. A short sale would be tough for a first deal, but might be a viable option if there is no spread. There may be short sale people in your area and you could pick up a bird dog fee and help your friend out. Just because a sale date is set, doesn't necessarily mean it will actually go to sale on that date. Your friend might be able to live free and save some money for a few months. Depending on the situation, some lenders prefer to have someone in the house keeping it up rather than having a vacant house subject to vandalism. If the bank forecloses, they incur expenses. A lot depends on your local market.