My favorite method to purchase foreclosure property is "subject to" the underlying mortgage. This method works even better if you don't have to bring the loan current but are able to get the seller a forbearance agreement or better yet a loan modification from the lender. If you do this it does require that the seller give you full cooperation to fill out the extesive paperwork necessary to do a forbearance and it also takes considerable time.
The real life scenario, as opposed to that of the real estate gurus and seminar junkies, means that the person in forclosure wait until about 5 days or less before the sale to call me and tell me that all the things they had worked out have now fallen apart. This is a classic ATCO (its all taken care of). The only way to stop the forclosure now is to bring it current and quickly for cash.
Take caution with regard to bringing forclosures that you will purchase, subject to current. You have to make sure to do your preliminary title work so that you can determinif there are other skeletons in the closet. Do not bring a loan current until you do this and also have the property deeded to you.
I do most of my business in Florida and to avoid seasoning issues tend to do all of my forclosure deals with Land Trusts. This also gives me another layer of control. Land Trusts are another weeks worth of Blogging and maybe more so lets just say "Be sure to have the Deed".
Some people call me a softy but I always make sure to take care of the seller. They are usually in dire financial straits. I am far from a bleeding heart and I know they got themselves in this mess, but I sleep better at night knowing that I helped to make a bad situation a little better for a fellow human being. Assist them in finding a place to live, to move and if there is some decent money in the deal help with the first and secuity. You will feel better for it and maybe even get a referral. If nothing else you can use them for a reference when you speak to the next person that doesn't believe a word you say.
While all this is going on you can start looking for a buyer if you are going to do a quick flip or start to plan out what needs to be done to the home to get it ready for resale of rental.
More of this stuff next time. Until then.....
Yours in success,
Dick Weiss
http://www.whoisdickweiss.com Get your FREE Newsletter
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