Columbia, SC · Member since 2019 · 32 posts · 6 votes
I am looking at a few homes in the area that are in pre-foreclosure (laws in SC appear to not have anything against investments in pre-foreclosures). However, when I run across them on a back-end search, they all have Law Firms attached to them. Is it possible to wholesale the contract even though the original home itself has, what I'm seeing, a foreclosure lawyer on it?
I am looking at a few homes in the area that are in pre-foreclosure (laws in SC appear to not have anything against investments in pre-foreclosures). However, when I run across them on a back-end search, they all have Law Firms attached to them. Is it possible to wholesale the contract even though the original home itself has, what I'm seeing, a foreclosure lawyer on it?
The lawyer is hired by the lender to do the legal work for the foreclosure. It's perfectly legal to bring the loan current or pay it off before the sale. The lawyer is the one who can tell you how much is necessary and by what date the reinstatement must occur.
You would be taking an unacceptable risk, in my opinion, trying to wholesale a property that is getting close to a foreclosure sale without first bringing the loan current. This means giving a check of $5,000 to $15,000 or more to the bank to get them to cancel the foreclosure. People are normally 6 payments to 12 payments behind, have unpaid property taxes, late fees and legal fees. It all adds up.
You will need the homeowner's cooperation to pull it off. I don't know specific foreclosure laws for S.C., you should learn those if you want to play in that arena, but I've bought houses in pre-foreclosure out west for 25 years. It's profitable if you have cash to work with and learn the procedures.
I am looking at a few homes in the area that are in pre-foreclosure (laws in SC appear to not have anything against investments in pre-foreclosures). However, when I run across them on a back-end search, they all have Law Firms attached to them. Is it possible to wholesale the contract even though the original home itself has, what I'm seeing, a foreclosure lawyer on it?
The lawyer is hired by the lender to do the legal work for the foreclosure. It's perfectly legal to bring the loan current or pay it off before the sale. The lawyer is the one who can tell you how much is necessary and by what date the reinstatement must occur.
You would be taking an unacceptable risk, in my opinion, trying to wholesale a property that is getting close to a foreclosure sale without first bringing the loan current. This means giving a check of $5,000 to $15,000 or more to the bank to get them to cancel the foreclosure. People are normally 6 payments to 12 payments behind, have unpaid property taxes, late fees and legal fees. It all adds up.
You will need the homeowner's cooperation to pull it off. I don't know specific foreclosure laws for S.C., you should learn those if you want to play in that arena, but I've bought houses in pre-foreclosure out west for 25 years. It's profitable if you have cash to work with and learn the procedures.
Columbia, SC · Member since 2019 · 32 posts · 6 votes
7y
@Account Closed Wholesaling the property to a buyer who will pay off the debt and fees, take the home, and still make a profit for both parties ([equity dependent]even post-rehab if rehab needs to be done). Where does the risk come in that you speak of? To me, it sounds like a different strategy of wholesaling that is less risky if there is a "subject to my partners approval" under the wrap around agreement right?
Specialist · San Antonio, TX · Member since 2012 · 865 posts · 351 votes
7y
What @Account Closed said. It’s normal to have a lawyer involved at that stage in the game. I have payed a whole seller an assignment fee before then brought loan current myself. If your gonna sell your contract than seller it to an investor that understands and has done a number of sub2 deals.
@Account Closed Wholesaling the property to a buyer who will pay off the debt and fees, take the home, and still make a profit for both parties ([equity dependent]even post-rehab if rehab needs to be done). Where does the risk come in that you speak of? To me, it sounds like a different strategy of wholesaling that is less risky if there is a "subject to my partners approval" under the wrap around agreement right?
If you come across as a Foreclosure Prevention Specialist you may be in violation of the S.A.F.E. Act
If you promise the seller that you will have a buyer before the sale and you don't find one you may be sued
If you misrepresent the property to the seller, and the seller backs out and the house goes to sale, again you may be sued
If you act as a real estate broker that may be illegal in S.C. (I don't know the local law)
If you do everything properly and make no promises and are within the law and no mistakes are made and are within the time frame of the foreclosure and have a buyer that doesn't back out at the last minute and have a clear title and do things through escrow, then you are probably okay. Check with a local attorney.
Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
7y
@Nigel Witherspoon's sarcasm. There are lots of things that can go wrong. If you have a weasel clause to get out of the contract things are ok for you, BUT you just strung someone along thinking that you were going to help them only to get abandoned at the last minute. They lose their house and you feel ok because you got out of the contract.
That is NOT cool.
PLEASE just make sure that if you get a property under contract from someone who is about to get foreclosed on, that you do what you say you are going to do. You are dealing with very vulnerable people.
Columbia, SC · Member since 2019 · 32 posts · 6 votes
7y
@Rick Pozos That isn't my intention as I do not have any buyers involved with pre-foreclosure yet in the state of SC so I'm not entering this field yet. I had to ask a hypothetical question because there are a lot of different scenario's that can go on when dealing with foreclosure wholesaling so I wanted to make sure I understand each aspect and that one seems like it's the most common brought up one so I wanted to ask you guys. Making sure I educate myself before I step into that sort of arena.