BiggerPockets

Originally posted by Michael De La Nuez

I know someone that works for a lawyer that represents banks when properties go into foreclosure. Now I am new in to the real estate world so please bear with me. This particular person works in a department where he has access to files that go pretty much in the following order:

1) Owner of property defaults on mortgage

2) Bank sends lawyer a referral to start paperwork to foreclose on property

3) They have to set a hearing to the judge so that the client (bank) can explain how defendant defaulted on the mortgage

4) When the judge grants it, the foreclosure process starts and the property goes to sell

5) They then do a notice to sell in the news paper for a certain date that the judge sets the sell

6) When sell day arrives, its like an auction in the courthouse, and client (bank) shows up, person that defaulted may show up to bid, and any third parties interested in the property.

My question is, is there anyway I can take advantage of this type of connection when in the wholesaling business? If this particular person tells me a particular property is about to go into foreclosure for example, sounds like a distressed property/owner and possibly distressed client (bank) because from what i hear banks do not like to hold real estate property. Is there a way I can tap into this as a source of deals I can get a hold of and package it together to my buyers list? He told me 70-80 properties go through a week, and the whole process takes about 30 days. He told me once a property was sold for $100 to a third party because the client (bank) and defendant did not show up at the court for the sale. My connection also told me this firm has a title company as well. Please let me know if there is anyway I can take advantage of this connection.

I can't believe nobody replied to this yet. This sounds to me like a GREAT connection as long as he's willing to give you leads. What you need to do is learn how to do Short Sales. What your connection is providing is sellers that are just starting to fall behind (at least thats what I got from it?) and need to find a way out.

Not all of these are going to work out as Short Sales (which is why you need to learn), some could be great as a Subject To, others could become Lease Options or the seller could carry back a note and you could get in for little to nothing out of your pocket.

What you can do with these leads would somewhat be dependent on your available capital. For example, you NEVER want to take a property Subject To the existing financing if you don't have $ in the bank to step in and start making payments. I personally don't believe in wholesaling Subject To deals.

Every situation will be different so you can't take any one strategy and apply it to all the leads they can give you.

What you can do is tell him that you are a Real Estate Investor and you would be happy to look at the leads to see how you can help. When you get a lead, post it up here and plenty of people will be happy to give you advice on the best options for that deal.

Sorry for the scattered rambling in my post, feel free to ask for clarification on anything that doesn't make sense.

Jeff

***"Jeff,

Thank you very much for your time and response.

I do know that he will definitely give me the leads without a doubt. He told me that there are some files that even take up to a year to foreclose so I guess thats good because it gives me access to possibly motivated sellers"***

That's a great source that you should be able to utilize to grow your business. Keep in contact with this guy, he'll give you deals that should have little to no competition on.

***"I know nothing about short sales, and I do know that I have to search the forums to learn a couple of things about it. But anything you wish to share about short sales please do."***

I'm just learning short sales myself, take the time to read the short sale forum and learn from the experts on this site. There are some VERY sharp investors on this site and several that know their stuff on short sales. Listen, ask questions and learn from them.

***"I was wondering if learning short sales will benefit me in pursuing the wholesaling field? How can/do they work together?"***

Short answer here would be YES. You can "flip" a short sale as long as it is a truly great deal that can be sold quickly for a profit. The good news is that a lot of homes that are going to be short sales are nicer then your typical distressed wholesale property which will allow you to sell to conventional buyers (NOT FHA Buyers). Conventional buyers will pay close to retail or even full retail price because they are going to live in the home, not rehab and flip it.

***"Not sure I understand what "Subject To" is. Does that mean I am subject to take over the mortgage/payments the owner of the property defaulted on?"***

That's correct. You would be given the deed to the home and take over payments without going out and getting your own mortgage. Don't put to much thought into this technique for now as it is best left to seasoned investors. (Just my opinion)

***"What do you mean by "carry back a note"? I do not know what that is, and again I know I have access to the search engine to find out but please share some knowledge if you can."***

Having the seller carry a note is like them becoming the bank. If they own it outright then they would create the note for the agreed upon amount and become the bank. You own the home and make your payments to them. If they have an existing mortgage on the property you can do a Wrap mortgage. Focus on the basics first and learn about these techniques as you go. There are lots of threads on here about both of these topics.

***"I also have to look in to "Lease option" because I really have no idea what it is about."***

Lease Options can be a great way to buy and sell. Look up Wendy Patton, she is an excellent source for Lease Option knowledge and has a book written on Lease Options and Subject To's.

***"Reference this connect, the light bulb struck above my head when I thought maybe I can get a hold of these possibly distressed owners going into foreclosure and work out a very good deal worth enough to send to a buyers list. The only thing is I do not know much about creative financing tecniques to make the deal with the distressed owner so that I can make good offers."***

Build your buyers list and turn these leads into deals. With a strong buyers list you've got a great opportunity for success. Good luck. Hopefully I answered your questions, please feel free to ask more.

Jeff

Jeff,

Thank you very much for the information you shared. I will definitely work on it.

Originally posted by Jeff And Cheray Warner

Can someone tell me why my quotes don't work when I'm trying to break down someone elses post and answer questions one at a time?

Make sense?

Jeff

Jeff -
Just hit the quote button next to the post you want to quote and it'll do it for you.

I'm just curious if any deals ever came from this connection?

Jeff