Wholesaling and Foreclosures

[Kevin McCormick]

Hello Everyone, I have a question. Can someone make clear to me how I as a wholesaler can make deals with those in Pre-Foreclosure or homeowners who don't actually own the house out right yet. 

[William Murrell]

I'm assuming that by "don't actually own the house" you mean they still have legal claim for the house, but just don't own it outright.  So like in NC, they are the one on the deed but they still have a mortgage and don't own it outright.  

Either way, you figure out your numbers and make an offer to the person based on where you need it to be, not based on what they owe.  How much they owe is not really your problem.  For example, if they owe 125k on the house and I am comfortable offering 135k, then there's no issue.  They'll walk away with a little bit of money after closing.  However, if they owe 150k, then they'll need to bring money to the table to close out the deal.  And if they can't come up with that money, then you'll need to work on a short sale wherein they convince the lender to accept a sale price of less than what is owed.  I hope this helps.  

Stick to your numbers though!  I recently looked at a house that I needed to get at ~120k to hit my numbers, but the guy owed 180k.  We were way too far off to come to a deal and he didn't feel like coming up with sixty grand just to get out from under the house.  In a case like that, you just refer them to someone else and keep looking.