Trustee Sale vs Foreclosure?

Question

Good morning all,

Let me preface by saying that I am brand new to wholesale real estate.  I went on my county's tax website to see foreclosures and was brought to a page that lists filed Notices of Trustee Sales.  Am I able to reach out to the grantor to try to get the property under contract, or am I misunderstanding this process?  (I know that people enjoy giving condescending and sarcastic responses, but some polite answers would be greatly appreciated.)

Jay Hinrichs · Answer

I don't think Texas has any law against it..  CA WA OR do though.. or specific ways to deal with those in foreclosure I should say.. I think Texas is wide open.

I have done a lot of pre foreclosure work in my day when you could legally do it the way 95% of us did it in those days.. now its not legal.

but lets say its legal... what we found is a massive case of denial by those in foreclosure.. and if you in foreclosure you have gotten literally hundreds of letters from your lender.. hundreds of letters from investors.. and it all becomes a blur.

WE had success by door knocking 2 to 3 days before the sale that is when they are motivated.. then stopping the sale by either bringing it current or paying off the mortgage.. taking title then reselling.. NO way was there time to wholesale.

not saying you could not find an acorn in the bunch.. but I think you will find this to be true.. uber competitive and you better have cash..

Michael Quarles · Answer

Good to meet you...

Texas is unique mostly in a GREAT way. However in the pre-foreclosure arena it may be too late. Their publish period is very short which tends to put you up against the wall in most cases where a state like California although we have foreclosure purchase laws our notice period is 90 days for Notice of Default and 21 days for Trustee sale. Texas doesnt publish the first stage which is only 20 day and the TS state is 21. As Jay mentioned, most pre-foreclosures tend to be procrastinators especially knowing that Texas has a 120 day late period requirement before anything can be initiated and the first period can begin.

Michael Quarles · Answer

Try and keep your list criteria to

30%+ equity

SFR

5+ years since last date sold

Try and stay under 225,000 in value since your median rent is 1600 a month a PITI loan payment at 225000 is around 1584.00.

Happy house hunting

Michael Quarles · Answer

absentee owners living out of state are your best prospects. Give them a shot

Naeishia Nance · Answer

@Roland Paicely Lol.  No need to apologize for the laugh.  It's very true.

And thank you for that.  I've seen a lot of people mention reaching out to preforeclosure property owners and I thought that was what the county website was taking me to.  It wasn't until I opened the PDF docs that I realized they all said NTS.  So I was just wondering what the difference was.  I'm trying to figure out the "easiest" type of property situation to deal with and expand as I get a little experience under my belt.

Roland Paicely · Answer

Ha ha ha, you are so right.  Some of the answers are condescending and sarcastic.  Sorry about the laugh.  It just struck me as funny when I read that.

While I'm not an expert on Trustee Sales in Texas.  My guess is that there are deals there by reaching out to the owner.  The challenge that I'd expect is that the owner has probably been inundated with legal notices and mail from investor/buyers that sometimes they simply ignore everyone.  It may not make sense.  Since an investor is hoping to help the owner.  The entire process can be so overwhelming that they bury their head and hope the problem goes away.  Which it does when they are kicked out of the house.  Hard but true.

Another thing to keep in mind is that if there is a Trustee Sale scheduled.  You may be up against a time crunch.  I'm not trying to discourage you.  However, these are life happenings.

As I said at the beginning.  There probably are some deals there............Good luck!

Naeishia Nance · Answer

Thank you soooooo so much @Michael Quarles.  I really appreciate all of your suggestions.

Naeishia Nance · Answer

@Michael Quarles  Thank you for that info.

I guess I'm stuck now.  Wondering which property type would be the best for me to start off with.  I thought about absentee owners but I'm kind of lost on how to find leads, other than driving around.

Jerel Ehlert · Answer

Texas has no laws prohibiting people from contacting owners in foreclosure.

Having worked the pre-forclosure list, a curious phenomenon appeared: Most sellers didn't contact me until ~10 a.m. the Thursday before foreclosure Tuesday.  I guess that's when it finally hits home (pun intended).

Naeishia Nance · Answer

@Jay Hinrichs  Thank you for your response.  It gave me the info I was trying to figure out.  I will probably try another type of property situation first.  Luckily, I have a childhood friend that is an investor that is willing to buy properties from me as a wholesaler.  (This was actually his idea after I asked for real estate advice.)  I'm just trying to figure out where to start.  But this is clearly not the way for me.  Lol.  Thanks again!

Trustee Sale vs Foreclosure?

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