Can you wholesale a pre foreclosure?

18 Replies

Hello. I am starting out in wholesaling and was looking around today and found maybe 100 homes on zillow under the pre foreclosure status in a neighborhood. Went looked at them all, wrote them down and noted if it was abandoned, absentee, winterized, trashed or occupied. Had a idea to maybe later send a letter to all of the homeowners, and track down the absentee ones and send them a letter asking if they would like to sell their home to me and so on. And i got to thinking, can i put a contract down on a pre foreclosure for the amount they owe to the banks and such, then wholesale it? Do i have to go to the owner or the bank? Or is this even possible to get the home under contract?!? Thanks   

Uh, exactly how would this work?

Like posting 'missing dog' posters all over town?

Does the homeowner have any say or rights in this activity?

Have you considered other paths to wealth (besides this idea)?

Originally posted by @Rick H. :

Uh, exactly how would this work?

Like posting 'missing dog' posters all over town?

Does the homeowner have any say or rights in this activity?

Have you considered other paths to wealth (besides this idea)?

 Sorry if i kinda mis-worded some of it. By meaning sending letters i was meaning like sending letters to the homeowners who are in pre foreclosure to see if they would like to sell and or track down the absentee owners through the central appraisal district and mailing them to see if they would like to sell. Its like the bandit signs on the side of the road, instead of the people facing foreclosure call you, you go to them. Yes there are other ways too besides mailing to owners. No i dont have any money or credit anyways to do flips, primarily wholesaling at the moment.(I'm 15) But when i was out and about through neighborhoods i stumbled upon so many pre foreclosed homes. I have yet to make my first deal so i was looking to maybe make some money through this method to be able to market myself more down the road. But the big question i had was if there is a difference between wholesaling a regular house compared to a house in pre foreclosure. Do i have to speak with a bank instead? Work with a Realtor? Or can it even be done and i got back to having to market myself other ways.  

Yeah why not. Its still their property until the foreclosure is finalized. Speak to a Realtor? No Bank? No.. I imagine if theres equity and profit in the home, you quickly put them under contract, you get your buyer quick enough, get the buyer to give you a down payment and use some of that to get the sellers loan current. Then proceed to closing. Being upfront with all parties is a win win situation. 

But I'm not a Guru or Lawyer so I'm only giving an opinion. Don't worry the hard work will pay off.

Good luck young fella

If you're 15 years old.   I'm not sure you can do anything without mom and dad being there with you.  I know I wouldn't have anything to do with you.   No offense, but you're a kid  and impetuous.   Hopefully your posting here isn't some sort of joke.   I think I'd worry about finishing school and getting a job.   Maybe learn the ropes working construction or helping a realtor out when you're out of school for vacation. 

Originally posted by @Brian Mathews :

If you're 15 years old.   I'm not sure you can do anything without mom and dad being there with you.  I know I wouldn't have anything to do with you.   No offense, but you're a kid  and impetuous.   Hopefully your posting here isn't some sort of joke.   I think I'd worry about finishing school and getting a job.   Maybe learn the ropes working construction or helping a realtor out when you're out of school for vacation. 

 I was waiting for someone to say something about my age. (No offense taken) But to explain, ive been reading, doing research, driving around town, meeting and talking with local investors for about a couple months now. I have been dreaming and thinking about investing for longer than i can remember but i am wanting to get it started now since i have received my drivers licence. I do also take several building construction courses at my school. My brothers consist of a real estate agent and a licensed engineer who owns his own landscaping business looking to be a contractor soon. One of them has been working since he was 14, he now makes six figures and is 25 happily married with a daughter. My parents are very supportive and its really all they're doing is signing their signature then receiving a check ill be doing most of the dirty work but shh no one needs to know that. I am on spring break this week and really drove into searching the area and talking with more investors in my area, just trying to get the last hoops of the process down(contracts and paperwork) Thanks for reading 

Originally posted by @Geoffrey F. :

Yeah why not. Its still their property until the foreclosure is finalized. Speak to a Realtor? No Bank? No.. I imagine if theres equity and profit in the home, you quickly put them under contract, you get your buyer quick enough, get the buyer to give you a down payment and use some of that to get the sellers loan current. Then proceed to closing. Being upfront with all parties is a win win situation. 

But I'm not a Guru or Lawyer so I'm only giving an opinion. Don't worry the hard work will pay off.

Good luck young fella

 Thanks so much for the input I've been reading around and some people were saying stuff about Federal Laws protecting the homeowners so im asking around whether its a good way to get started or not. 

I think it's a good thing that you are researching and thinking about your future.   I'm not trying to dampen your spirit.   Just point out some realities of the situation.  You are the age of my nieces and nephews and there is no way I would enter into any sort of business transaction with them.   I think this is something you will run into.   I'd tag along with my brother the realtor and get a summer job doing construction  or working in one of the trades.   

Originally posted by @Geoffrey F. :

get the buyer to give you a down payment and use some of that to get the sellers loan current. Then proceed to closing.

I would avoid paying anything towards the seller's loan until the deal is closed. Just close before the trustee sale and then pay the arrears.

Have you done any research to see if there is an age restriction for doing real estate transactions? Are your parents willing to help you or sign legal documentation for you?

@Chaz Reid  

Yes, my parents are going to be helping me out on this. My brother is also of legal age to sign paperwork, plus he is a Realtor so i will be working with him too. 

Ok cool. Why are pre foreclosures so appealing to you?

@Chaz Reid

Well im looking to start out and not spend so much money on marketing and a found a large neighborhood which has probably a tenth of the homes in pre forclosure so i was like hey, maybe i could just direct mail some of those people to structure my first deal then accumulate more money to market with bandit signs and such. 

Why not try Craigslist marketing for motivated sellers? 

@Chaz Reid

Ya know that isn't such a bad idea. I forgot about online ad postings.. Thanks! i might start with that instead 

The awesome part is that it's in Pre-Foreclosure and not Foreclosure. The answer is, yes, you can wholesale pre foreclosures, and yes, you can get the property under contract for what they still owe on the home. 

When the any part of the foreclosure process happens, many of the home owners would love a way out that situation free and clear as quickly as possible.

So if you find a home that's worth $300,000, and the home owner still owes $$200,000, then contract it for the amount owed, add your assignment fee (and maybe a little extra to help out the homeowner), and wholesale it to an investor. 

The homeowner pays off the house, an investor has a new property, ad you've just earned yourself an assignment fee. 

It's not as cut and dry as that, but that's basically how the process goes. 

You want to make sure the numbers make since. Trust me, they never lie. 

Short sales are possible as well, but that's a whole other story! lol. Good Luck! :-D

Hey, don't ever let age get in your way. I'm 20 years old and would love more than anything to have discovered the amazing world of RE investing at your age. I have recently begun my wholesaling venture and I haven't had a deal yet either. I am currently targeting homes in Pre-foreclosure as well. Not only are you helping someone out of a tough situation, but you are also making money doing it! More power to you. I have tons of respect for you. Keep doing your thing regardless of what anyone has to say. "What you can conceive and believe, you will achieve."

Christopher, I know this is an old post but no post is really "old" on BP. I just stopped by to encourage you to keep up the good work. Don't let anyone discourage you. I wish I was your age when I started this business. I truly admire you for thinking about your future at that age - you could be doing what the average 15yr old does like getting yourself in trouble. Instead, you're working towards your financial future. When my son grows up, I hope he has a mentality like yours. God's speed & all the best to you!

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