Florida Foreclosures

22 Replies

I am interested in purchasing Pre-foreclosures in South West Florida, but I have been told that the laws in Florida do not allow for you to directly contact the homeowners. Can anyone shed some light on this and if it is the case, what are other investors doing to acquire homes in this market.

I'm not sure that assertion is correct, but perhaps @John Thedford  can shed some more light, since he's from the area.  

That information is not correct, I'm only doing pre-forclosures and know other very succesful investors knocking doors everyday on pre-forclosures homes. If it will be not legal our whole REIA would be in jail.

Hi @Jim Miller  

Companies like listsource.com will happily sell you lists of people in pre-foreclosure in SW Florida. You shouldn´t hesitate to send direct mail to these guys. Nothing wrong with knocking on their door either, but I´d rather avoid the aggression you might experience from uninterested sellers. 

As long as you're offering to buy, you're okay.  Not if you're "offering to help", delay, modify, etc.  And stay away from the sub2 "take over your loan" when you have no intention of catching up the loan, and simply collecting the rent til the borrower gets foreclosed on.

Totally agree with you @Jim Miller  

However, I'm getting lis pendes and NOD from the court the day after they were filed, by the time listsource optain that information I already have talked to the homeowner, you see, this is about timing, the quickest you get in to the sellers situation the better chance you have to HELP.

@Wayne Brooks  Sellers in distressed situation want HELP more than anything, I will never offer a seller to buy its house, I will always offer HELP them, this is why we are investor, to HELP distressed owners and make a profit to honor the effort.

Nevertheless, I won't offer a seller to delay or modify anything on the process even tough you can do it if you know how the banks work and doing this is totally inoffensive. For instance,by only asking for a correction in a complaint you can delay a process up to 30 days and this is only because the bank most of the time don't have the documentation in place in order to make any changes in a quickly manner, as long as you have a good reason to ask for a correction there's nothing illegal on doing it.

@Vladimir Gonzalez  

 So, if you're not buying the property, how are you "helping" them?  I'm quite familiar with the foreclosure/foreclosure defense process and the short sale process.

Thank you all for the clarification. I understand the rent skimming that is taking place and I am not interested, but is there anything wrong with taking a property “subject to” and trying to do a work out with the lender(s)? And can anyone give me any great insight into this process? And yes I am a newbie.

@Jim Miller  

Yes, when you take the property [email protected] you have taken all control away from the borrower, and if your work out fails, which it will the vast majority of the time, the borrower gets foreclosed on.  You're violating the same rent skimming laws, just as if you were renting the property, I believe.

@Wayne Brooks  

I never said I'm not buying, at the end of the day a sale has to occur, either from me or from a buyer that I'll put on place, if not the seller will loose the house in forclosure; what I'm saying is that I'll not offer buy the house I'll offer HELP them(save the house from going forclosure, preserve their credit, etc) and that there's nothing wrong with "offering to help" like you stated in your previous post. When you do a short sale on an underwater house you're not even buying the house from the seller, you're buying the house to the bank, so what you do is HELP the seller by buying the house to the bank at a discount price.Thanks

@Wayne Brooks  

What do you mean when you say Sub2 will fail the vast majority of the time?

I'll encourage you to ask @Brian Gibbons   , @Grant Kemp or @Karen Rittenhouse more about that.

@Jim Miller listen to the Podcast 070 and you will get a better idea of Sub2

http://www.biggerpockets.com/renewsblog/2014/05/15/bp-podcast-070-subject-to-grant-kemp/

@Vladimir Gonzalez  

I'm not the one who's opposed to the term "helping" someone in foreclosure, the Feds are.  But, if you're tying up the property with the "hope" of wholesaling it to an end buyer, then walking away if that doesn't happen, you've hurt the owner, by preventing an actual buyer from buying it, and avoiding foreclosure. If your guy buys it, then all is good.  And not that it matters, but when you do a short sale you Are buying it from the owner, with the banks approval of the shorted pay off, not buying it from the bank.  Perhaps just a matter of semantics, but technically correct.

Sub2 happens all the time, at the loan balance. Rarely will a sub2 buyer negotiate a short pay off with a foreclosure property. And a sub2 on a property with a mortgage in default, when you don't cure the default, sets you up for a host of legal problems. Even when you "paper them up" with all the disclosures in the world.

Well, the first step in a Sub2 when the house is in preforclosure is to cure the default, if not there's no deal at all to start with.

@Vladimir Gonzalez  

On this we agree.  But the OP was asking about entering into a sub2, then trying to do a work out/reduction....different animal.

Got it now, my bad. Yeah, I haven't heard about any success on working out a short pay on a Sub2, if there's any.

Originally posted by @Vladimir Gonzalez:

. For instance,by only asking for a correction in a complaint you can delay a process up to 30 days and this is only because the bank most of the time don't have the documentation in place in order to make any changes in a quickly manner, as long as you have a good reason to ask for a correction there's nothing illegal on doing it.

So, you are implying, you, an uninterested third party likely not a member of the bar association can work on a foreclosure complaint?   I don't think so.

I am curious what a typical "correction" looks like from your angle.   If I am the Mortgagee, my counsel drafts the complaint and files it.  It is my complaint not the borrowers.   Defendants do not make amendments to plaintiff complaints they answer the complaint.  This makes zero sense and it sort of sounds like somebody who doesn't know what they are talking about told you about this.

Further, practicing law without a license is absolutely against the law.

Originally posted by @Vladimir Gonzalez :

@Wayne Brooks  

What do you mean when you say Sub2 will fail the vast majority of the time?

I'll encourage you to ask @Brian Gibbons   , @Grant Kemp or @Karen Rittenhouse more about that.

@Jim Miller listen to the Podcast 070 and you will get a better idea of Sub2

http://www.biggerpockets.com/renewsblog/2014/05/15...

 As far as this podcast goes - here is follow up to that podcast.  

http://www.biggerpockets.com/forums/25/topics/1286...

@Jim Miller  

feel free to contact sellers if you want to make an offer pre-foreclosure. I personally do some mailouts if I feel there is equity in the property to make it worthwhile. There are a lot of people pursuing this same strategy though. Foreclosures are drying up in this area and the deals are very few and far between. The deals to be had will mostly be off-market properties that you might locate where sellers are motivated for other reasons such as divorce, unemployment, relocating, etc.

Yes; Direct Mail, Doorknocking, Cold calls, post its, etc.

@Zamir Kazi  

Originally posted by @Jim Miller :

I am interested in purchasing Pre-foreclosures in South West Florida, but I have been told that the laws in Florida do not allow for you to directly contact the homeowners. Can anyone shed some light on this and if it is the case, what are other investors doing to acquire homes in this market.

 Great thread guys! Jim, are you referring to buying a defaulted note as a pre-foreclosure? then yes, you can't contact the owner until you own the note. As others point out, if not, you should have no restrictions to contact them about short sales or other avenues. I am not an attorney and you should always have council when dealing in the different states for that state. Good luck and keep us posted on how it goes.

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