Finding Properties Before Preforeclosure - Substitue Trustee?

Question

Hello everyone. I'm new to real estate investing and am taking the wholesaling approach. I am attempting to find houses going into preforeclosure but am curious if there is a consistent and accurate way to find properties before they enter the preforeclosure process. I was told that doing a search for Substitue Trustees on the Register of Deeds website is the way to go. Is this true? Would love any input or tips and guidance in this area. Also would love advice on the best approach for these types of situations and any success / failures anyone has had. I'm here to learn.

Thanks in advance

Jay Hinrichs · Answer

what I mean is 99.5% of people are still in major denial.. and so trying to spend a ton of time dealing with them at the substitute trustee stage will be fruitless.

people in this situation in my humble experience only get serious the day before they lose it or 2 days before.

we never even contacted them until 5 days before auction..

and the reason we KILLED it is we had little competition.. most need loans to buy we did not.. most rely on attorney or title company for the transfer we did not we did it ourself.. Most cant call title company and get a date down on the phone  We could and did.

and most wont take the risk  which we did.. there is a lot of risk buying sub too with no title insurance or paying off a loan with no title insurance.. but that's were the big money is made in this field.

I would walk into the homes we bought and many times the people leave the 200 plus direct mail pieces they received right there in a neat pile on the counter.. I would read them.. get a feel for them.

One constant was it seems most people that buy these at least according to their flowery letter.. they too were down and out they too went through foreclosure they are just there to help them and save there credit..  Just a bunch of BS as you know.. they are there to do what we all do and that is snag a good deal.. nothing more nothing less.

now in our states on the west coast this is illegal.. and or I should say very strict rules to follow and violation of these is serious.. ergo we no longer do it.. as its not profitable.. just have to let them cycle through the system. And either buy them courthouse steps or when they hit as OREO  although not sure in your area but our area the foreclosures are down about 70 to 80%... mortgage defaults in our area is all time low.. but we don't have much sub prime and we have no hoody ghetto type areas.. pretty stable.. worse markets the homes sell for 200k or more..  deal flow is tough and that is a testament to the market bouncing back like we all hope it would and it should other wise we are really in trouble.

Jay Hinrichs · Answer

@Elizabeth Wilson  its far to early in the process.. having done this for many years before it became ILLEGAL in our state the only way we bought them was within 48 hours of the auction and usually the day before.

you need big time cash and big time risk and you need to have in at title company that will give you a date down on the phone.. if your in a title abstract state that takes for ever to run title I don't see this as any kind of viable.

Account Closed · Answer

@Reuben Royal....Starting out wholesaling, I quickly chose pre foreclosure homes. I thought going that way, I was going to be to make quick and easy money. I thought they were going to be already motivated to sell.

I thought wrong. LOL.  I have done it all, Bandit signs, Direct mails. But i've found door Knocking to be better than all else. Try that and you'll see a difference. Trust me.

website: www.investorfele.com

Elizabeth Wilson · Answer

@Jay Hinrichs - yep. yep. and yep.  All makes sense and from my experience I completely agree with you.

As for foreclosure auctions around here, we quit going when the hedgefunds and everyone's brother started paying almost retail for these homes.    We still get a lot of foreclosures.  Or at least a lot of notices of foreclosure.

In other areas of the state where we work the foreclosures have almost dried up.

No real complaints.  I hate to see anyone lose their home.

Elizabeth Wilson · Answer

@Jay Hinrichs -  not sure I fully understand your post.  Not sure what you mean by too early.

I’d still buy pre-foreclosure if a seller contacted me; we just don’t target market for those anymore.

Elizabeth Wilson · Answer

@Reuben Royal - Before you head down this route and spend lots of time and money trying to wholesale pre-foreclosures, from our experience (almost 4 years) of trying to buy pre-foreclosures is that the owners either want to home to go into foreclosure (sounds crazy but true) or are so underwater that they can't do anything with it.

We did everything from door knocking, mailing, etc and the only way we ever bought them was at auction.

Also many states have strict laws regarding putting homes under contract that are in pre-foreclosure.  If you have the money to close, you should be fine but if you don't I would do some research.

Not to discourage you but wanted to share what our experience has been.

Finding Properties Before Preforeclosure - Substitue Trustee?

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