Max Purchase Price for Pre-Foreclosed Property

[Joseph Hernandez]

Hello. A little birdy told me to stay away from targeting expensive properties in pre-foreclosure stage. The reason given is because these borrowers have other options that don't include selling their property to investors. What other options? In your opinion, how much is the maximum property value would you target? Thanks in advance.

[John Slater]

Quote from @Joseph Hernandez:

Thanks Kevin, good feedback. Do you know how to get homeowners in pre-foreclosure out of denial? Also, at what point do most of them get out of denial? A few days before auction day?

It's not denial is the right word anymore.  Bottom line is people dont want to sell while in pre-foreclosure, ultimately they may need to sell versus want to sell, so some serious push back on selling yes, but its simple a process to educate the homeowners about their options.  If they can do a loan mod and keep their home, awesome, they kept a home for the family and I have no reason to help them reach a decision to sell in those cases.

But by presenting options, helping them understand all their options, helping them works through some of them realizing that option wont work for them, then understand how selling is a real option, often the best option, then you'll have a better chance at a deal.

As for value.  Higher the value, higher the potential for a headache and a burnt pocket.  But no, there aren't more options available to someone with a higher value house.  An investor offer is always going to be lower in this market than a traditional buyer, so yes listing on the market will likely be their best option assuming they have time in the foreclosure process.

No property should be going to auction like @Kevin Ivey bought.... got to be an interesting set of circumstances to allow your 1mil property to get sold at 600k...