Wholesaling A Foreclosed Home

8 Replies

Hey BP!

So I got a lead driving in a good neighborhood. The homes are going for 230k and this home looked as if it needed some TLC. I knocked on the door and proceeding to have a conversation with the homeowners girlfriend. After letting her know what I did she told me the homeowner is in prison. But they are looking to sell. I got all the information I needed and followed up because I saw the home is in FORECLOSURE. She said it’s been in foreclosure for a while she doesn’t know how long. I got in contact with the homeowner via: written letter to the prison. He confirmed they owe 190k. I let him know that that price was too high for me because it’s not repaired. He understood and I built so much credibility plus them being in a desperate situation he wanted to know if he can sell it to me for a number that will work for me. Now this is going to be my first deal and I need to know if I can purchase a foreclosure for less than what is owed from the owner or is this something I have to deal with the bank directly?

Yes, as I understand it you will need to get the bank to do a short sale. This can take a long time. I saw one go for over a year but I think it is usually about 4 to 6 months. You will learn a lot by working this deal even if you don't get it done. You will be a better investor for it. Good luck.

Short sales have to be listed on MLS and exposed to the market. You will not be able to negotiate with the bank as a buyer. The realtor will not be able to negotiate with the bank without the authority to do so, will not be able to negotiate as your representative without it being listed, without a full package submission of a purchase and sale agreement and, without the numbers working.

Sounds like a hardship for the owner yes, but doesn't sound like a short sale if the homes are worth $230K, only needing TLC and a debt of $190. I get that's more than you want to pay but that doesn't make it a short sale.

You will spin your wheels trying to fit a square peg into a round hole on this one.

This is an owner financing deal. The loan will need to be kept in place. Reinstate the amount owe and continue to make monthly payments. They carry a note while you fix and make payments then... when the property is ready to put on the market and once you sale then he will transfer title and you profit 

Originally posted by @Eddie Gonzalez :

This is an owner financing deal. The loan will need to be kept in place. Reinstate the amount owe and continue to make monthly payments. They carry a note while you fix and make payments then... when the property is ready to put on the market and once you sale then he will transfer title and you profit 

 Yeah...what he said. Just make sure you are prepared to pay it off in full if the lender calls the note for the seller financed sale.

I'd try to go the short sale route. If you don't know anyone to negotiate it just look for realtors that have short sales in that area. They can negotiate it or refer you to someone. 

You may get a good deal but you will need the funds to close. Short sale contracts are not assignable and often come with 30 - 90 day deed restrictions. 

I would not want to owe 190k on a house that could sell for 230k, especially if it needs repairs. There will likely be no profit after you take into account repairs, holding costs, realtor fees, and closing costs. 

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