How to approach and acquire home owner in foreclosure?

Question

So, I was made aware that a homeowner who lives next to one of my properties in default and possibly going to go into foreclosure shortly. The house is a mess and I know I could rehab it cheap and increase the value by a ton (because I just did it with the house next door).

Anyway I have heard of investors taking advantage of situations like this. Approaching the owner, paying off their debt, giving them like $10K in a cash payout and having them sign the deed over to you. I just don't know how exactly this gets set up, or if that even makes any sense.

Is there another piece to this move? Anyone have experience doing this? Suggestions on executing something like this?

Ehsan Rishat · Answer

@Vincent PlantIf you're really interested in purchasing the property, the best option would be to door knock and talk to the principal owner. I would not waste time sending them postcards and wait for their response.

Rene D. · Answer

I'm interested in this too. I have seen many houses in 'pre-foreclosure'. I have sent letters to the owners but have yet to hear back from one but that doesn't deter me. If I were you, I would do what the previous poster mentions AND send a letter before door knocking.

Lynnette E. · Answer

First you need to figure out how much debt is against the title.  There could be a first, HELOC, contractor liens, tax liens, etc.  Do a title search and find out what debt is attached to the title, then ask the homeowner to find out the exact payoff amount for ALL mortgages/HELOC debts before you set a price.  Don't set a price as XX in your pocket.  They may be upside down on their debt to house value.  Go through escrow, get title insurance.