About to attempt my first door-knock on a pre-foreclosure house..

21 Replies

I've found a property I'm interested in which a 'notice of trustee sale' has been issued and is 'scheduled' to be auctioned in a couple months time.

It appears to not be completely repossessed by the lender and the owner of record lives at the property.  The lender on the property is Wells Fargo.

However, there is no listing agent or attorney representing the lender that is attached to the MLS listing that I can find. I also cannot find the property on Wells Fargo list of owned properties to inquire about it.

I'd love to have this property as a long term buy and hold rental and/or eventually as a primary residence.  There is substantial equity in the house.  My plan is to knock on the door and let the owner(s) know I'm interested in purchasing the house.  

Is it as simple as establishing contact, creating a relationship and drawing up a purchase agreement (obviously with title and inspection contingencies)?  Do I then need a RE agent/broker/realtor or an attorney to draw up an actual contract assuming we come to some sort of purchase agreement?

How does financing work at this point assuming I don't have a briefcase full of cash?  Use a hard money lender to pay off the existing balances on the house and then get it refinanced in my name (paying off the hard money lender after using the built in equity)?  Just take the purchase agreement, transfer title and take it to my conventional lender?

Does Wells Fargo need to be involved with this somehow?  

I know this topic has been beat to death so thanks in advance for any advice pertaining to this particular situation.

I DID IT!  First door knock complete!  Was prepared for a door slam and instead the owner took down my details.  Now we'll see what happens!

Thanks to BP for all the support hahahahaha

Sounds like it went well.

One thing I would check in the future is legalities. I am not sure if it is all areas, but some have laws against door knocking solicitations. Sounds like this was a non issue for you. Now is time to research the house and a possible offer, then follow up if you don't hear from them in a couple weeks.

Originally posted by @Brian Pulaski :

Sounds like it went well.

One thing I would check in the future is legalities. I am not sure if it is all areas, but some have laws against door knocking solicitations. Sounds like this was a non issue for you. Now is time to research the house and a possible offer, then follow up if you don't hear from them in a couple weeks.

 Good call.  I know the area pretty well and it's fairly laid back but in today's litigious society it's never a bad idea to check.  This particular property has avoided the foreclosure auction going on four years now, I can't imagine this being a sustainable model for the owner.  Very curious if we hear back from him.  We put together a follow up letter thanking him for his time and re-establishing our desire to possibly help one another.

@Brian Erickson how did the conversation go? I'm just curious as to what was said that made them willingly take down your info. I have several places in my area that are in the same situation, and I'd love to either buy or help the owner out by listing it. Fear of rejection definitely stops me. I guess I feel that me bringing up the fact they're in foreclosure would offend them.

@Brian Erickson What mls listing? If it’s in the mls, the Owners have it up for sale....the bank doesn’t own it yet, so they couldn’t sell it.  A foreclosure going on four years doesn’t usually ah e any equity.

@John Koopman Go knock on that fist door, it’s the hardest one.  I used to feel the same way...the first sale I made as an agent was from door knocking, the first day I did it.  And remember, you Are providing a service and help for the owner....unlike a wholesaler looking to clip them for the lowest price they can.....even though I’ve done that as a buyer too.....best two deals were door knocking right before foreclosure.

Originally posted by @John Koopman :
@Brian Erickson how did the conversation go? I'm just curious as to what was said that made them willingly take down your info.

I have several places in my area that are in the same situation, and I'd love to either buy or help the owner out by listing it. Fear of rejection definitely stops me. I guess I feel that me bringing up the fact they're in foreclosure would offend them.

I was fully prepared to get the door slammed right in my face.  Definitely had to psych myself up!  We were actually hanging out with family members that had been foreclosed on right before leaving for the house.  I asked them how they would feel if it were them in that situation again, they told me he would have been upset for sure (didn't help my nerves).  Onward!  We made our way to the property anyway, I wasn't leaving until I at least asked the owner if he was interested in selling.

Basically, I told him that we were interested in relocating into his neighborhood (which we are, though it would be a BRRRR rental until we were ready to move) and if he was interested in selling his house. He then mentioned that I must have been doing some foreclosure research, where I then geared up for immediate rejection. I told him there were multiple properties that we were interested in and I thought the best way to try to get in was to meet the owners and ask them in person (may have gained a small amount of respect there). I told him that if it was something he was interested in that we could both potentially benefit from a transaction.

[Also, tried to implement some Michael Quarles wisdom and take a couple steps back after knocking on the door and threw in some Chris Voss by trying to mirror a few things that he mentioned.]

In (what I imagine was simply a defense mechanism) turn he mentioned that this is just something 'they do' year after year (NOD's have been filed for multiple years in a row, I can't imagine there is any strategy there) and that the place was not going to be foreclosed on. But immediately after that he said, 'Buuuuut, let me get your information...'

Long story short, it was nerve wrecking and slightly terrifying.  I had to remember my 'WHY' and it out weighed the potential rejection.  I believe that it's much easier to throw a yellow letter away than it is to completely ignore someone that is at your door.  Not just that, but your presence can hopefully leave more of a personable impression.

I wasn't leaving the neighborhood until I did it and I'm stoked I did!  We've written a follow up with an attached picture to solidify our interest and keep the door open to further the relationship.  Excited for what may come of it but no matter what I won't have any 'what if's'!  

Originally posted by @Wayne Brooks :

@Brian Erickson What mls listing? If it’s in the mls, the Owners have it up for sale....the bank doesn’t own it yet, so they couldn’t sell it.  A foreclosure going on four years doesn’t usually ah e any equity.

@John Koopman Go knock on that fist door, it’s the hardest one.  I used to feel the same way...the first sale I made as an agent was from door knocking, the first day I did it.  And remember, you Are providing a service and help for the owner....unlike a wholesaler looking to clip them for the lowest price they can.....even though I’ve done that as a buyer too.....best two deals were door knocking right before foreclosure.

Apologies Wayne, I did say it was an MLS listing. That wasn't true, I found it on Redfin or Zillow I believe. But there was no seller agent attached to the listing nor was there a contact to get in touch with from the lender, there was no contact information at all. I ran the parcel number through the county website and got as much information as I could. As much as we do love that neighborhood, I only have been pursuing properties that have cash-flow potential or built in equity. Which surprisingly, if the county website is anywhere near accurate, it looks like there may be some 'meat on the bone' so to speak. Fingers crossed!

I've only had one slam on me,  most of the time people are receptive but also skeptic, I leave my info if they don't answer.  it helps to go as a male-female duo,  men won't likely scream in front of the female, and females are more likely to open a door to a couple, rather than a single stranger male.

I've had so many door slams, been told to leave, and one time had a gun pointed in my face.  All that meant to me is I'm on the right track.  Its a numbers game, so I've become accustomed to rejection and after years I just try another objection handling technique.  I'm not gonna get every deal, but if I made $20,000 on a deal, then all I need is 5 per year to increase my revenue by $100k.  Keep knocking!  If no one is yelling at you yet, then you are not knocking on enough doors.  

I once knew an attorney that never lost a case.  When I asked him how he did it, he said "I never took one"

Originally posted by @Maurice D. :

I've only had one slam on me,  most of the time people are receptive but also skeptic, I leave my info if they don't answer.  it helps to go as a male-female duo,  men won't likely scream in front of the female, and females are more likely to open a door to a couple, rather than a single stranger male.

when i did this as my primary acquisition model.. i had 3 teams of door knockers all male female.. male was there for support the females in our teams were the rock star's very very good at calming poeple down and getting our deals done. but even with this and hitting every single NOD in the 3 county PDX MSA 2 million plus.. if we got 2 deals a month that was average anything more was HUGE..

lots of leg work.. for most folks.

Knocked on 15 doors random afternoon after feeling good about my workout. 1 out of those 15 called me 2 weeks later and its about to be my best deal ever!  going to be 70k in profit on a flip .. My first homerun!   Glad we both overcame the fear!  Best of Luck my friend 

Seems like a lot of door knocking success here.  I'm curious what criteria is generating leads for you guys?  Are you using websites, looking at Notice of Defaults, or what?  I'm not afraid of knocking doors, so I'd love to give this a shot.  And once you're there, what questions are you asking to create a win/win deal?  Clearly there are going to be some qualifiers to make sure the deal is worth it on your end.

Originally posted by @Maurice D. :

I've only had one slam on me,  most of the time people are receptive but also skeptic, I leave my info if they don't answer.  it helps to go as a male-female duo,  men won't likely scream in front of the female, and females are more likely to open a door to a couple, rather than a single stranger male.

 We definitely thought about this as well but we have three little kiddos and didn't have any child care that day, so didn't want to stroll up with the whole family.  But in our marketing campaign we're taking the family business angle and giving potential clients the ability to deal with either myself or my wife, I'm hoping the option will appeal to both sexes.

Originally posted by @Jeff Lundeen :

Seems like a lot of door knocking success here.  I'm curious what criteria is generating leads for you guys?  Are you using websites, looking at Notice of Defaults, or what?  I'm not afraid of knocking doors, so I'd love to give this a shot.  And once you're there, what questions are you asking to create a win/win deal?  Clearly there are going to be some qualifiers to make sure the deal is worth it on your end.

 Since my first (and semi successful attempt) I haven't done a ton more.  My original criteria was fairly simple, there was an hyper-local area in which we eventually want a primary residence, so I had a quick glance online at houses for sale and ran across some pre-foreclosures.  Upon more 'amateur' digging I found the property could have substantial equity so I knocked there first.  But there are areas in which we want to eventually own rentals and we literally 'walk for dollars' and I will be knocking as we go next time.  I figure it's pretty much just like direct mail, except you're a direct person.  Not every house will actually have the criteria to make it a deal but you never know!  Plus you might learn more about the neighbors and the neighborhood.  I can't answer which questions are best since I've only done this a handful of times, but being organic as possible and creating a relationship seems to be the best approach for me so far.  

Originally posted by @Alex Young :

Knocked on 15 doors random afternoon after feeling good about my workout. 1 out of those 15 called me 2 weeks later and its about to be my best deal ever!  going to be 70k in profit on a flip .. My first homerun!   Glad we both overcame the fear!  Best of Luck my friend 

 Yessss!!  Congratulations!!  We're just taking our first steps over here in the investment world and haven't even done our first deal yet but we're already hooked.  Learning so much, staying determined and taking action, we are GOING to crack into this game.  So pumped for you on that and for the deals that follow!!

Two big indicators are stickers on the door...  Ooo I love seeing those stickers  ( either means vacancy,   bank owned, foreclosed on, or going on auction).   But as for door knocking, properties stick out like a  sore thumb.  Look for untrimmed  bushes when the the neighbors have clean yard... look for semi damaged roofs and houses that have mold/mildew on gutters and siding.   THE BIGGEST INDICATOR and this is a good secret , are houses with missing/cracked/or uneven shutters. shutters are like the face lift/makeup to the house....  if they neglect them , usually means they don't want to impress the neighborhood anymore.

With overgrown bushes could be a timing thing and they just haven't got to it... with the roof and mold, could be they just dont have the powerwasher or tools at the time.... But with the shutters, you know when something doesn't look right and if they leave the shutters crooked or off, they just dont care no more 

As go knock on doors as a regular guy. No one wants to be greeted with someone all dressed up. These are people that most likely are in bad financial situations. Approaching as a "professional investor" to me will scare some away thinking that you are all about the money.  

When I door knock, I'm wearing my work clothes ( sweatpants and a shirt that is usually covered in paint or mortar)  Id like to think that id give a sense of honesty.  So approaching with your family and just having a conversation about the neighborhood, what you want, where you are from.. is easy and genuine. 

@Jeff Lundeen

@Brian Erickson

Originally posted by @Alex Young :

Two big indicators are stickers on the door...  Ooo I love seeing those stickers  ( either means vacancy,   bank owned, foreclosed on, or going on auction).   But as for door knocking, properties stick out like a  sore thumb.  Look for untrimmed  bushes when the the neighbors have clean yard... look for semi damaged roofs and houses that have mold/mildew on gutters and siding.   THE BIGGEST INDICATOR and this is a good secret , are houses with missing/cracked/or uneven shutters. shutters are like the face lift/makeup to the house....  if they neglect them , usually means they don't want to impress the neighborhood anymore.

With overgrown bushes could be a timing thing and they just haven't got to it... with the roof and mold, could be they just dont have the powerwasher or tools at the time.... But with the shutters, you know when something doesn't look right and if they leave the shutters crooked or off, they just dont care no more 

As go knock on doors as a regular guy. No one wants to be greeted with someone all dressed up. These are people that most likely are in bad financial situations. Approaching as a "professional investor" to me will scare some away thinking that you are all about the money.  

When I door knock, I'm wearing my work clothes ( sweatpants and a shirt that is usually covered in paint or mortar)  Id like to think that id give a sense of honesty.  So approaching with your family and just having a conversation about the neighborhood, what you want, where you are from.. is easy and genuine. 

@Jeff Lundeen

My W2 is essentially 'driving for dollars', so I've been putting organic mailing lists together based on houses I find in the exact conditions you describe.  I can't always door knock each house, especially in uniform but whenever someone is out working in the yard I always try and ask about the neighborhood or particular houses if they're close.  Recently found several probate houses that I didn't even know were there to begin with due to overgrowth!  An honest, working, family man is the not just my approach but my actual life and that's how I want to run our business too!

@Brian Erickson wow man Awesome job! I was just thinking about knocking on some doors in a neighboring neighborhood for the more personal touch. It’s encouraging to hear your take as well as others. They say the first one is the hardest but I got to get some momentum and get this train movin