What's the strategy for pre-foreclosure deals?

Question

Assuming I market to a list of pre-foreclosure properties added in the last 30-60 days, what would be my strategy for virtual wholesaling these deals? Are these best suited for subject-to type deals?

Joshua McGinnis · Answer

Hey @Scott S. You can get them from listsource.com.

Scott E. · Answer

A bit off topic @Joshua McGinnis , but where are you getting your pre-foreclosure lists? I've tried the county and banks but no luck..

Bill Gulley · Answer

Another reminder of the new federal law concerning homeowners in foreclosure, getting involved, approaching them with a solution to their problem or attempting to delay the process or misinformation to a lender, can carry big fines and jail time, better know what you're doing......and no, I doubt cash buying Realtor/Brokers will be pawning off great deals to you, why wouldn't they buy them if they had enough room for a profit?

P/F are not a good thing to mess with trying to wholesale, you drop the ball on buying and it might be your head, not worth the risk IMO. Even if you were there, and you're not! :)

Joshua McGinnis · Answer

I've made two broker contacts on the ground in Cleveland who are also cash buyers and have contractors they trust. They've offered to help me with the logistics of me putting a home under contract and dealing with taking photos, assessing repairs, running comps, etc.

I'm taking a risk that they'll actually come through as I've never worked with them, but I'm trying not to focus too much stress and energy on that right now.

If I end up in a situation where I have a motivated seller and the deal looks good at a high-level and these contacts don't come through, I'll have to get real creative (hit the phones, BP, etc).

JPaul Mills · Answer

I'm with you on the difficult part.  I think the best results for the Pre-Foreclosures is to stay in your general Market and knock on doors.  Yeah Some would say that the door knocking is not their thing but many of these people are facing a situation that they dont know what to do about.  and you might be the guy to help them.  when you speak to them face to face you need to tell them how you can help their situation and show them that there is a way out from foreclosure

Curt Davis · Answer

Trying to lock up pre-foreclosure deals is very difficult bc they are usually upside down on their property with no equity in the home to make it attractive to potential buyers.  Its actually better when the home goes into actual foreclosure.

Are you going to tell these potential sellers you are going to try and flip the home or are you going to lead them on to think you are going to actually purchase the home?

Who will be running your comps and inspecting the home for potential repairs?

This is a very difficult task, even more that you are long distance.

Good luck