Strategies for no/low equity vs. high equity pre-foreclosures
Long Beach, CA · Member since 2024 · 7 posts · 0 votes
Strategies for no/low equity vs. high equity pre-foreclosures
10 Replies
- 1yJoel BongcoBusiness MemberInvestor · Honolulu HI & Los Angeles, CA · Member since 2018 · 375 posts · 181 votes
Aloha Christian, I mostly do pre-foreclosures in Hawaii and Southern California. For the low/no equity leads, they could be candidates for a Short Sale. For the high equity ones, you can possibly do a Equity Split, Subject To, Carry Back/Seller Financing, etc. HTHS! Joel
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yYeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.
Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
- Long Beach, CA · Member since 2024 · 7 posts · 0 votes1y
Quote from @Ken M.:
Yeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
Hello Ken. Thank you for your response. Can you tell me a little bit about why you suggest to avoid CA, OR, and WA please? Also, are there any market recommendations you can give me for pre-foreclosures?
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Christian Gamboa:
Quote from @Ken M.:
Yeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
Hello Ken. Thank you for your response. Can you tell me a little bit about why you suggest to avoid CA, OR, and WA please? Also, are there any market recommendations you can give me for pre-foreclosures?
It's a criminal act in those 3 states plus other random states around the country. It's best to contact a real estate attorney in the state(s) you wish to chase foreclosures. By the way, just because someone chases foreclosures in a state where it is illegal, and says they have had no problems, doesn't mean they won't eventually get called into court. These violations last as long as 10 years. It's also illegal to drink while you drive. The consequences when caught are severe. Yet, to there risk (and our risk because they are on the road drunk), they still drink and drive. Chasing foreclosures is a sensitive issue to prosecutors and advocacy groups.
It also can be a federal crime to chase foreclosures in the wrong way, anywhere.
Get trained or chase a different animal. - Long Beach, CA · Member since 2024 · 7 posts · 0 votes1y
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Yeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
Hello Ken. Thank you for your response. Can you tell me a little bit about why you suggest to avoid CA, OR, and WA please? Also, are there any market recommendations you can give me for pre-foreclosures?
It's a criminal act in those 3 states plus other random states around the country. It's best to contact a real estate attorney in the state(s) you wish to chase foreclosures. By the way, just because someone chases foreclosures in a state where it is illegal, and says they have had no problems, doesn't mean they won't eventually get called into court. These violations last as long as 10 years. It's also illegal to drink while you drive. The consequences when caught are severe. Yet, to there risk (and our risk because they are on the road drunk), they still drink and drive. Chasing foreclosures is a sensitive issue to prosecutors and advocacy groups.
It also can be a federal crime to chase foreclosures in the wrong way, anywhere.
Get trained or chase a different animal.Thanks for the advice Ken. However, I am confused as to why you are saying it is illegal to chase foreclosures in CA. I just looked it up and at least, in CA, it is NOT illegal to purchase a home while in the pre-foreclosure process. Is there something I'm missing?
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Christian Gamboa:
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Yeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
Hello Ken. Thank you for your response. Can you tell me a little bit about why you suggest to avoid CA, OR, and WA please? Also, are there any market recommendations you can give me for pre-foreclosures?
It's a criminal act in those 3 states plus other random states around the country. It's best to contact a real estate attorney in the state(s) you wish to chase foreclosures. By the way, just because someone chases foreclosures in a state where it is illegal, and says they have had no problems, doesn't mean they won't eventually get called into court. These violations last as long as 10 years. It's also illegal to drink while you drive. The consequences when caught are severe. Yet, to there risk (and our risk because they are on the road drunk), they still drink and drive. Chasing foreclosures is a sensitive issue to prosecutors and advocacy groups.
It also can be a federal crime to chase foreclosures in the wrong way, anywhere.
Get trained or chase a different animal.Thanks for the advice Ken. However, I am confused as to why you are saying it is illegal to chase foreclosures in CA. I just looked it up and at least, in CA, it is NOT illegal to purchase a home while in the pre-foreclosure process. Is there something I'm missing?
@Jay Hinrichs: Is the expert on pre-foreclosure in CA. I can't point you to the specific law, but he has personal experience. Maybe he will respond or you can find him at https://www.biggerpockets.com/forums/311/topics/1233275-top-...
His is the 2nd post.Let me clarify, it is perfectly alright to bid at Auction for foreclosures. The problem comes in when contacting people before the auction date.
- Long Beach, CA · Member since 2024 · 7 posts · 0 votes1y
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Yeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
Hello Ken. Thank you for your response. Can you tell me a little bit about why you suggest to avoid CA, OR, and WA please? Also, are there any market recommendations you can give me for pre-foreclosures?
It's a criminal act in those 3 states plus other random states around the country. It's best to contact a real estate attorney in the state(s) you wish to chase foreclosures. By the way, just because someone chases foreclosures in a state where it is illegal, and says they have had no problems, doesn't mean they won't eventually get called into court. These violations last as long as 10 years. It's also illegal to drink while you drive. The consequences when caught are severe. Yet, to there risk (and our risk because they are on the road drunk), they still drink and drive. Chasing foreclosures is a sensitive issue to prosecutors and advocacy groups.
It also can be a federal crime to chase foreclosures in the wrong way, anywhere.
Get trained or chase a different animal.Thanks for the advice Ken. However, I am confused as to why you are saying it is illegal to chase foreclosures in CA. I just looked it up and at least, in CA, it is NOT illegal to purchase a home while in the pre-foreclosure process. Is there something I'm missing?
@Jay Hinrichs: Is the expert on pre-foreclosure in CA. I can't point you to the specific law, but he has personal experience. Maybe he will respond or you can find him at https://www.biggerpockets.com/forums/311/topics/1233275-top-...
His is the 2nd post.Let me clarify, it is perfectly alright to bid at Auction for foreclosures. The problem comes in when contacting people before the auction date.
Ken, thank you very much.
Jay, I appreciate you taking the time. Can you explain to me what the problem is in contacting people before the auction date?
- Long Beach, CA · Member since 2024 · 7 posts · 0 votes1y
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Yeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
Hello Ken. Thank you for your response. Can you tell me a little bit about why you suggest to avoid CA, OR, and WA please? Also, are there any market recommendations you can give me for pre-foreclosures?
It's a criminal act in those 3 states plus other random states around the country. It's best to contact a real estate attorney in the state(s) you wish to chase foreclosures. By the way, just because someone chases foreclosures in a state where it is illegal, and says they have had no problems, doesn't mean they won't eventually get called into court. These violations last as long as 10 years. It's also illegal to drink while you drive. The consequences when caught are severe. Yet, to there risk (and our risk because they are on the road drunk), they still drink and drive. Chasing foreclosures is a sensitive issue to prosecutors and advocacy groups.
It also can be a federal crime to chase foreclosures in the wrong way, anywhere.
Get trained or chase a different animal.Thanks for the advice Ken. However, I am confused as to why you are saying it is illegal to chase foreclosures in CA. I just looked it up and at least, in CA, it is NOT illegal to purchase a home while in the pre-foreclosure process. Is there something I'm missing?
@Jay Hinrichs: Is the expert on pre-foreclosure in CA. I can't point you to the specific law, but he has personal experience. Maybe he will respond or you can find him at https://www.biggerpockets.com/forums/311/topics/1233275-top-...
His is the 2nd post.Let me clarify, it is perfectly alright to bid at Auction for foreclosures. The problem comes in when contacting people before the auction date.
Ken, thank you very much.
Jay, I appreciate you taking the time. Can you explain to me what the problem is in contacting people before the auction date?
Because of the fraud in the 2008 crash, foreclosure laws were changed. In Washington it is a criminal act to approach someone in pre-foreclosure unless you are a real estate agent, attorney, lender or licensed foreclosure counselor and then you can't benefit from owning or assigning the property. It has to be a "hands off" professional fiduciary situation. @Jay Hinrichs says it's the same in CA and OR.
https://www.atg.wa.gov/mortgage-and-foreclosure-scams
https://www.atg.wa.gov/enforcement-actions
https://oag.ca.gov/consumers/general/foreclosure_scams
"IF YOU TRANSFERRED YOUR PROPERTY OR PAID SOMEONE TO "RESCUE" YOU FROM FORECLOSURE, YOU MAY BE A VICTIM OF A CRIME."I've spoken about this extensively on Bigger Pockets and If I can find the links, I'll post them again.
Yeah, it's a bummer and I'm expecting to have the same fallout regarding SubJect To/SubTo because of the way it is being taught on youtube by everybody's favorite guru. It's only after the litigation begins that people realize they've broken the law and then it is too late. The judge ignores the "I didn't know" defense.
Ok I see, you guys are talking about pretending to "rescue" homeowners from foreclosure. It is illegal to pose as a foreclosure consultant and pretend that you will help homeowners avoid foreclosure and charge a fee for that service, but it is not illegal to purchase a home that is in pre-closure process as long you make it clear that you're intent is to purchase the property and are not offering a service to help them avoid foreclosure. Would you agree?
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yHere's some more
Quote from @Christian Gamboa:
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Quote from @Christian Gamboa:
Quote from @Ken M.:
Yeah, avoid doing them in CA, OR and WA. For sure, for sure, for sure.Quote from @Christian Gamboa:
Hello everyone,
I am currently working on a pre-foreclosure list (SFR) and I am wondering what strategies are best for no/low equity properties vs. high equity properties. Can someone with experience in pre -foreclosures provide me some information or guidance? Thank you in advance.
Hello Ken. Thank you for your response. Can you tell me a little bit about why you suggest to avoid CA, OR, and WA please? Also, are there any market recommendations you can give me for pre-foreclosures?
It's a criminal act in those 3 states plus other random states around the country. It's best to contact a real estate attorney in the state(s) you wish to chase foreclosures. By the way, just because someone chases foreclosures in a state where it is illegal, and says they have had no problems, doesn't mean they won't eventually get called into court. These violations last as long as 10 years. It's also illegal to drink while you drive. The consequences when caught are severe. Yet, to there risk (and our risk because they are on the road drunk), they still drink and drive. Chasing foreclosures is a sensitive issue to prosecutors and advocacy groups.
It also can be a federal crime to chase foreclosures in the wrong way, anywhere.
Get trained or chase a different animal.Thanks for the advice Ken. However, I am confused as to why you are saying it is illegal to chase foreclosures in CA. I just looked it up and at least, in CA, it is NOT illegal to purchase a home while in the pre-foreclosure process. Is there something I'm missing?
@Jay Hinrichs: Is the expert on pre-foreclosure in CA. I can't point you to the specific law, but he has personal experience. Maybe he will respond or you can find him at https://www.biggerpockets.com/forums/311/topics/1233275-top-...
His is the 2nd post.Let me clarify, it is perfectly alright to bid at Auction for foreclosures. The problem comes in when contacting people before the auction date.
Ken, thank you very much.
Jay, I appreciate you taking the time. Can you explain to me what the problem is in contacting people before the auction date?
Because of the fraud in the 2008 crash, foreclosure laws were changed. In Washington it is a criminal act to approach someone in pre-foreclosure unless you are a real estate agent, attorney, lender or licensed foreclosure counselor and then you can't benefit from owning or assigning the property. It has to be a "hands off" professional fiduciary situation. @Jay Hinrichs says it's the same in CA and OR.
https://www.atg.wa.gov/mortgage-and-foreclosure-scams
https://www.atg.wa.gov/enforcement-actions
https://oag.ca.gov/consumers/general/foreclosure_scams
"IF YOU TRANSFERRED YOUR PROPERTY OR PAID SOMEONE TO "RESCUE" YOU FROM FORECLOSURE, YOU MAY BE A VICTIM OF A CRIME."I've spoken about this extensively on Bigger Pockets and If I can find the links, I'll post them again.
Yeah, it's a bummer and I'm expecting to have the same fallout regarding SubJect To/SubTo because of the way it is being taught on youtube by everybody's favorite guru. It's only after the litigation begins that people realize they've broken the law and then it is too late. The judge ignores the "I didn't know" defense.
Ok I see, you guys are talking about pretending to "rescue" homeowners from foreclosure. It is illegal to pose as a foreclosure consultant and pretend that you will help homeowners avoid foreclosure and charge a fee for that service, but it is not illegal to purchase a home that is in pre-closure process as long you make it clear that you're intent is to purchase the property and are not offering a service to help them avoid foreclosure. Would you agree?
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