Preforeclosures...School me

[N/A N/A]

Pre-foreclosure - The loan is in default and the seller is facing foreclusure. It seems like the bank pays the seller the value of the home minus the owner's equity in the home. So, from an investors perspective, if you find a property you are interested in that is in the preforeclosure state, is this the price you offer?

I guess, essentiall what I am after is, if you are able with a title search to determine the amount of equity that a seller has is apre-foreclosure property, how does that affect your offer? What are the pro's and con's of preforeclosure and foreclosure?

Thanks, and please humor my limited nderstanind of this process - I'm a tech guy:)

[Jay Hinrichs]

Originally posted by @Ole B.:

Originally posted by @Ryan Webber:

Yes. If the purchase price isn't low enough then you lose money.

Hello Ryan,

Thanks for your contributions!

I see this reply is twelve years old, and hope you are still active lol.  The one thing I am not understanding about wholesaling pre-foreclosures is what to get them under contract for with the seller, and how exactly the seller profits from the deal?

For instance, if I find a house with lots of equity, and I get the payoff statement and realize the seller owes $50,000 (including back payments), is that the number I get the house under contract for? (Assuming I have already factored in all the expenses for my end buyer and have determined it's a deal?  

If so, where exactly does the seller make money, or does all he get is his payments taken over, his credit saved, and his house doesn't go into foreclosure, but he still loses the house?

Thank you for the help.

YOu need to read up on the laws in Oregon.. since this post was made new laws came into effect. you must be a LICENSED foreclosure consultant to help those in foreclosure.. the ONLY thing you can do is buy them and you cant wholesale in Oregon the way guys and gals do in others states . Oregon is very clear you cant market what you dont own.. you may want to go to the Rarebird meetings and get with some locals..  I used to prior to the new laws coming into effect solely concentrated on pre foreclosure and court house steps.. but no more. And the laws a tough and it is not worth the risk for our company in any way shape or form.. even though i would be considered a licensed foreclosure consultant based on my state mortgage bankers license.. you are still precluded from charging more than a modest amount to help these folks and you certainly  cant rip their equity in a wholesaling as taught by guru's and others on BP..  What you can do though is buy it for cash and once you own it resell it.. you cannot rent it back to the old owners thats a no no as well.