Places to find deals?

Question

I'm just starting out (2 months of just knowing what real estate is) and wondering where or how could I market to find deals? I'm wondering and this is just a scenario in my head but wanted to see if it make sense, correct me in my terminology, this is what I've gathered of reading and asking people lol

Let say "XYZ" person has a house, somehow I stumble upon their listing and realize their about to foreclose for non payments or are a delinquent renter/owner who has not payed their dues over some time, would their be any way I could find out who has the property note to buy at a 'discount' and negotiate terms with them if they really want to stay in the property? or if they are really just not negotiable, foreclose the property or wholesale the note before foreclosure?

Now another scenario is can I somehow find a list of houses and where could I find the comps for the property? I heard someone said only brokers and agents have access to the comps in the area is this true?

Juan Perez · Answer

Originally posted by @Hattie Dizmond:

@Juan Perez

First, welcome to BP.  Start with the Podcasts, read the Ultimate Beginner's Guide, and get involved with the Forums.

Now...to your question...

Texas is a non-judicial foreclosure state.  That means there are no lists of pre-foreclosures.  There are no requirements for a Notice of Default (NOD) to be filed with the county.  The first time a property with a delinquent mortgage is reported to the county is when the auction date is set.  That means you have maybe 45-days to cure the delinquency, before the property is auctioned on the steps of the county courthouse on the first Tuesday of the specified month...aka...Texas Tuesday.  Everyone, including the lien-holder (mortgage lender) bids on the property with a level playing field...sort of.  It's more level for some, because it takes cash to purchase the property at auction.

@Colin Smith is correct.  Banks will almost always (small, local lenders may be an exception) list their properties (These are properties they have bought back at auction.) with a realtor.  These properties are referred to as REO - real estate owned.  There are agents & brokerages who specialize in REO properties.  The big banks - BofA, Wells, Chase, Citi, etc - have websites with their REO properties listed.  You can Google for a link.

There are a lot of services that will tell you they can get you a list of delinquent mortgages.  That's a bunch of BS in Texas.  The other thing about Texas is, it's a non-disclosure state.  That means that sales prices of properties are not automatically public record.  The best source is the MLS, which only realtors have access to.  However, even the MLS is only as good as the realtors who have to update it, since it isn't automated at sale.  Realtor.com, Zillow, and other national services DO NOT pull the final sale price from the MLS in Texas.  The $ figures you see are the last listing price.  Therefore, you can't use those prices of sold homes to calculate an accurate CMA/ARV price.  However, there are some local searches that do pull directly from the MLS, so it is possible to get a comp just as accurate as that a realtor can pull together.  You will have to do a little investigating about what services provide that data in Houston.

As for "can I find a list of houses"?  I'm not even sure how to answer this one, because there are a myriad of ways to get lists.  But, what kind of list are you looking for?  What is the criteria for the list?  Why would you want to run comps on all the properties on the list?  You'll have to provide a little more context on this one.

Hope that helps.

Wow a lot of good information, well to short answer the questions yes, I'm looking for slightly distressed properties I can wholesale since usually if its older and needs some work in my mind the FMV will be lower right? (not all the time but seems most of the time?)

To answer the other questions well I imagine that technically you want to run a comps on the house you are about to do a deal on to see the % your are getting it at compared to the FMV/ARV? I will try and see if I can find someway to find the real comps of the property since that is a good way to negotiate the price or make sure you will not get screwed? I'm just assuming all of this information lol

Hattie Dizmond · Answer

@Juan Perez

First, welcome to BP.  Start with the Podcasts, read the Ultimate Beginner's Guide, and get involved with the Forums.

Now...to your question...

Texas is a non-judicial foreclosure state.  That means there are no lists of pre-foreclosures.  There are no requirements for a Notice of Default (NOD) to be filed with the county.  The first time a property with a delinquent mortgage is reported to the county is when the auction date is set.  That means you have maybe 45-days to cure the delinquency, before the property is auctioned on the steps of the county courthouse on the first Tuesday of the specified month...aka...Texas Tuesday.  Everyone, including the lien-holder (mortgage lender) bids on the property with a level playing field...sort of.  It's more level for some, because it takes cash to purchase the property at auction.

@Colin Smith is correct.  Banks will almost always (small, local lenders may be an exception) list their properties (These are properties they have bought back at auction.) with a realtor.  These properties are referred to as REO - real estate owned.  There are agents & brokerages who specialize in REO properties.  The big banks - BofA, Wells, Chase, Citi, etc - have websites with their REO properties listed.  You can Google for a link.

There are a lot of services that will tell you they can get you a list of delinquent mortgages.  That's a bunch of BS in Texas.  The other thing about Texas is, it's a non-disclosure state.  That means that sales prices of properties are not automatically public record.  The best source is the MLS, which only realtors have access to.  However, even the MLS is only as good as the realtors who have to update it, since it isn't automated at sale.  Realtor.com, Zillow, and other national services DO NOT pull the final sale price from the MLS in Texas.  The $ figures you see are the last listing price.  Therefore, you can't use those prices of sold homes to calculate an accurate CMA/ARV price.  However, there are some local searches that do pull directly from the MLS, so it is possible to get a comp just as accurate as that a realtor can pull together.  You will have to do a little investigating about what services provide that data in Houston.

As for "can I find a list of houses"?  I'm not even sure how to answer this one, because there are a myriad of ways to get lists.  But, what kind of list are you looking for?  What is the criteria for the list?  Why would you want to run comps on all the properties on the list?  You'll have to provide a little more context on this one.

Hope that helps.

Colin Smith · Answer

Welcome to BP and REI!

If the house in foreclosure then the likely first lien holder will be the bank. Banks will always want their properties listed with an agent and you'll have to work through an agent if you want to buy that property. Unfortunately, your not going to be able to wholesale a house that is in foreclosure. In fact, usually (not always) the only time a short sale will make a good deal is if it is for a buy & hold investment strategy. There is typically just not enough equity there for a flip and banks don't like assignable contracts which means you won't be able to wholesale it either.

If you want to start out wholesaling you are going to have to do a lot more work yourself and not just look for foreclosure lists.

As for comps. Agent / brokers will by far have the most accurate data to evaluate properties, however, thats not to say you can't get a general idea for ARV using websites like Zillow. You just need to be extra careful as their data isn't always accurate, updated, or even close to being correct at times.