Originally posted by @Philip Brown :
My wife and I are getting started in rei in the Phoenix area, and we want to purchase pre-foreclosure homes. In Maricopa county, once a house gets an NOD (known as notice of trustee's sale here), it gets assigned an auction date. We've read/heard some conflicting info and would love to hear from Phoenix-area investors.
1. Are you allowed to approach the homeowners (by call, mail, etc.) if they are issued an NOD? 2. If you connect with the homeowner, does the bank have to approve any deal you make as long as the loan is paid off?
Thanks for any insights!
Your question: "does the bank have to approve any deal you make as long as the loan is paid off?" No, the bank doesn't have any say in the transaction as long as the loan, arrears, late fees and legal costs are paid off before the sale.
The real first question is "why put your hard earned money into doing the hardest & riskiest kind of real estate investing"?
Don't get me wrong, that is how I started out too & made my first mil. The difference is it was in the 1990's, the laws were different, I was a loan officer so I knew what the financing, banks and laws were all about and I had a great real estate attorney. I STILL ran into trouble. Turns out people in pre-foreclosure will lie (gasp!!!!) when they think they have left money on the table and some lawyer gets a hold of them. I won the case though, it was three years of litigation and set a precedent in the Ninth Circuit Court of Appeals. Yawn. That is a distinction I could have gone my whole life and never missed. ;-) We can have lunch and I'll share the details.
This is a new day tho' ever since 2008, Dodd-Frank, law changes in 2012 and the S.A.F.E. Act. If you Know your stuff you can still do them. Would I recommend it? Heck no. Too many other ways to make more money safely.
Go into real estate investing to be profitable, with low risk, having fun. I've outlined various ways people can enjoy investing profitably, here is a sample spreadsheet that you may want to consider:
Thanks for the info, Mike! I'm definitely going to be looking into this more. I'd also love to get together with you and learn some stuff from someone who has done it before.