Tax (pre)foreclosures

2 Replies

Hello BP,

I'm a newbie in this whole investing business. I would like to get started investing by wholesaling properties to help build some capital and then transition into fix and flips and buy and holds. I am in an area where some properties are still going for under 10k, also I'm about 30 minutes or less outside of Detroit. I haven't come across any deals yet but I got curious and put up a few Craigslist ads. Not shortly after I received 2 emails from other investors who have properties that are in the process of becoming tax foreclosures. Only problem is I Don't know exactly what to do next to wholesale them. Please help!!!

Jerron:

Need to ask the investors what do they mean by "in the process of becoming tax foreclosures". How far behind are the taxes and how much is needed to bring them current, you just need to pay one year to make that happen. Double check in the county where the homes are located in for that.

Next, find out what the houses are worth, remember to wholesale a property there has to be enough meat on the bone for the next guy. Ask the investors what they were looking to get out of the deal and see if it worth it. To be a good wholesale deal with repairs included it should cost you no more than 50% of the Selling price in that area. Again, meat on the bone for the next guy. 

Ask the other investors for the story on the homes, why are they selling, etc. That will tell you a lot. 

Get set up with a local title company to close the deals in and perform what is called "title peeks" - which is a quick title search to make sure there are no surprises before you place it under contract. A full title search will be done at the time of closing, but this peek is go for knowing how to proceed or not proceed with the opportunity. Title peeks should only cost $25-$35 well worth it.

Hope that helps, good luck. 

Yea I would ask the same thing and I would get it under a contract and put it up for resale or lease option.

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