Hey guys and gals,
I've never purchased a property as an investment, I'm as rookie as they come. I'd sift through the forums trying to find a response but if there is a deal time is of the essence...
I went driving for dollars just getting a feel for my market and I found a house that looked vacant, upon closer inspection, I saw a past due water notice on the door. I wrote a letter to the owner of record. They called me back. Here's the scenario:
Owner's mother is a real estate agent but knows nothing about short sales. She was the one that called me. The couple that own the house are going through a divorce and despite the bank ordering them to list the house for sale, apparently the wife won't sign anything to agree to list the house. As a result of that the house is not on the market at all. The bank has changed the locks and are going through the foreclosure process. The mother thinks that they owe nearly what it's worth so it would definitely be a short sale situation if there is a deal to be had.
She can get her son to sign a release to permit the bank to speak to us about the balance, etc.
What would you pros do? Maybe it's nothing? just an unlisted property that will go to foreclosure and not worth messing with. Maybe not?
I should add that this house is on a great lot in an extremely desirable area, so much so, even if the short sale couldn't work investment-wise, I'd move in myself...
Thank you in advance for reading and your advice.
I would get permission to speak to the bank... get real numbers from he bank. Often the owner doesn't even know how much they owe (principle, penalties, interest, etc.)
Tell the bank you want to make an all cash offer. They'll probably put you in touch with a different department.
Make your offer and see what happens.
The mother is a real estate agent but doesn't know anything about short sales? Wow, is that like a GC not knowing how to use a hammer?
Other than that, have you looked up the official records on the owners? Not sure if every county has the records online now, but you can usually Google (insert the county) official records. This can help you find any of the foreclosure docs that have been filed. You will likely see the lis pendens and when that was filed. If the foreclosure is far enough along you might find a final judgment showing the date the property will be put up for auction (the date the bank can fully take back the property if no one outbids them at the auction). This should give you an idea of what kind of time you have. If the property is being auctioned next week you have a lot less time.
After that I agree with Daniel, have the owner sign a release and reach out to the bank on their behalf. I definitely think you have found something with potential, the best deals these days are deals found like you have, being in the right place at the right time and reaching out to the owner. Once you can figure out the timeframe and the options with the bank, that would help you figure out what your options are. If they owe 2x what the property is worth, you might not have any options but to see if you can buy the property when it is auctioned.
Hope that helps.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!