All Forum Posts by: John Slater

Quote from @Beau Alesi:

So me and my friend, who is the owner of the house are going into contract and going to try to get this house approved for the short sale. I just got the general contractor to write up a report with all the deficiencies with the house. I’m sure his agent which I know personally he’s going to submit a good package to the bank, but is there anything else you would recommend to crease the likelihood of them excepting this contract also, like I said in the previous post this for closure has been going on for probably 6+ years and it’s been to auction twice already and pulled off because whatever my friend finagled. Sorry I’m voice typing. Thank you very much.

Short sales now are very different to short-sales 10 years ago. It's more difficult to get the 'investor' discount unless there are some major issues with the property.  As an agent I wouldn't submit an offer to the lender unless it's at least 80% of the perceived appraised value.  Having a contractors report is good, but it's the appraisal you'll be most likely fighting with, not the lender.  At the end of the day whatever the BPO says, thats the numbers the lender is working off.  Whats the worst case scenario??? you don't get it at the value of want.. sounds like he's going to lose it at some stage no matter what.

@Patrick Mahoney - if you shoot me the address in a DM I can check better for you, but this is likely the scenario.

many 2nd's from 2004-2006 era have been sleepy/dormant for a long time.  These were the old ELOC's that you don't see too often now.  They were dormant while the properties had no equity.  When the market increased, especially here in california, these seconds were bought by glorified debt collectors and actually amounted or the majority of foreclosures during covid as they weren't bound by the foreclosure moratorium.  Even 2 years after covid, 2nd's are still be sold off to lenders/debt collectors with their sole intention to foreclosure.

Now, the laws in california...  If you buy the second, yes you own the property, NO the seller has zero right of redemption, however, if bought it as an investment property, at auction, you WONT receive the deed to the property until around day 45!  We have a lovely Newsome bill giving any random person or tenant the right to over bid you within 30 days (except the old owner) if they are going to occupy as there personal residence... No investor can outbid you, only someone using for personal residency.  Any surplus from overage of paying off the 2nd will go to senior liens.  Imagine the homeowner pocking $50k overage and the first sat there saying "What about us?"  The old owner can't make money on the property being sold at auction while senior liens exist.

@Marty Boardman I'm with you! It is not easy to contact the bank and get a payoff for the first!  its possible, once you have a deed in hand (45 days later) and then you're hoping to get to the right person that helps you out.  You do not have access to the borrowers lender.  They do not have a contract with you, it's with the borrower, and privacy rights yada yada dictate the lender is giving up information personal to the borrower to a stranger!... now, being the owner of the property gives you some rights, but no 100%.  The first could eventually foreclosures, and now there's more chance of getting a payoff from the foreclosure trustee versus the lender.  Understand the laws of your state, other states have different laws and it wastes time understanding what might happen in IL, when you are in CA.  

Quote from @Antonio Reed:

Hello guys I’m new here own 2 rentals and I am on my first flip and working on a foreclosure property tomorrow and have all the paperwork to sign but need help finding out how to make sure they in fact get out of the property June 1st if they can’t get a new spot due to damage credit? 

 Don't close until they are moving out.  There will be a challenge getting a rental. #1 price point, renting is expensive in our area, #2 credit challenges will cause an issue, I've helped several relocate and sometimes 6 months advance rent has been the only option for a landlord to accept.  There's no shortage of rental applications as their competition.

I would never rent back to the seller.  There's always an emotional attachment different to that of renting it to someone else.  and the eviction process here could be super challenging.  If the deal is good enough then stumping up the eviction costs could make sense.  Do you have the ability for cash for keys in the deal? as in are they getting money, and if so, they dont get it until they are moving out.  

Quote from @Minna Reid:

Well first of all, just because a judge gave her authority to sell without him, the lender doesn't care about that, and in a short sale there is a very high possibility he will still have to cooperate with the short sale, provide documents etc.

This is why I generally stay away from angry ex on mortgage situations. He can prevent this sale if he wants to be a jerk. 

Also - Unless you can get the 1st position lender to view the private loan as a second mortgage, the lender will most likely pay nothing to the junior - you will have to. Try anyway - but odds of success are low.

However -the junior will likely accept a short payoff for a lien release, especially if they can still pursue the ex for the rest. How much they will do it for is a mystery. I like to start with a $500 offer - see where it goes. Be prepared that as the buyer, this will be an out of pocket cost to you and cannot go into the purchase price. Also these negotiations are not between the 1st and the 2nd, they will be between you and the second. 

@Sean Dougherty - great knowledge in this post from @Minna Reid and a 'practical' perspective on getting the short-sale done.  Investors see it one way, agents handing the short-sale for the seller another way.  Only addition I would add is that the lender could accept a short-sale based solely on her request based on supplying court documentation granting her the rights to sell..... but, on the other hand they might now..... The selling process and short-sale negotiations are two different animals

Quote from @Santosh Prabakar:

I'm under a contract to buy a fixer and the title company notified me the property has liens and the seller need to bring in additional funds around 20k to close it. The seller does not have the funds to cover the liens.

Seller and his agent is going to approach the bank to check if they will let the property sell it to me with the bank taking the 20k loss. The property I think is already under pre foreclosure.

Just looking for general recommendations from the BP community. What are the odds the bank will agree to the sale taking 20k discount. How common is this approach and will it be a lengthy process?

It depends on the situation and details we are missing....

You are under contract for how much? and how much is the total amount of liens on the property? Based on your comment, i would assume you are under contract for what was believed to be the loan balance?? otherwise, if its for more than perceived loan balance, and seller would be receiving funds from the sale, then he has the money to pay off the 20k... or am I missing something?????? 
Is the true value of the property the same amount you have it under contract for?...or do you have it at a discount of what it could actually sell if listed properly on the market....... 

If, you are purchasing for the a true value of the property, and that happens to be less than what is owed total on all the liens, then thats a different conversation of short-sale and negotiations with bank etc.. and thats not you or your agent, that would be an agent on behalf of the seller... his loans, his house, his negotiations on a short-sale.

 

Quote from @Jacquelyn Place:

 I'm absolutely stuck in analysis paralysis,  I need a mentor of some sort.  I think I've done far too much research and now I've got myself f in an overload tunnel.  I  have properties in mind but this is where I'm stuck;

1) where should I start,  wholesale (to bank up some funds)  or invest and just go all in?

2) how to find a legitimate hard money lender, or private lender in my area? 

3) Do I apply for funding before reaching out to make an offer? 

4) the properties i am  after are foreclosed on, is this a different type of funding?

5) Lastly, what's your opinion on buying houses at auction? ( I've already seen the property and house, so I'm not going in blind)

6) also I'm not looking for a get-rich-quick scheme, I want to put my time and work in to be knowledgeable moving forward. My goal is simply to build security for my family and expand my knowledge in all things real estate.

1. Depends on your financial situation. Private lending isn’t super easy, a lot can be based on track record. If you need to wholesale some singles to build to build capital, great place to start. 
2. all relationship building, I have a guy I can connect you with over on the east. 
3. Yes. Solve that road block first to decide what you can and can’t do. 
4. active in foreclosure or REO’s? If bank owned already then some will allow traditional lending some might want cash offers. 
5. can be a great strategy, can also have pitfalls. Need to learn all about them to make sure you don’t get blind sided. And these are cash buys. 
6. great!

Quote from @Arjun Epu:

Thanks Eliot Elias for the reply. We still see quiet a good number of properties in mortgage foreclosure and it is a bit unorganised over there in harris county. what would be the max price investors bid on properties in trustee sale .. is it 70% of the ARV ? do investors go beyond this during bidding in general ?

 It all depends Arjun.  I'm seeing an average of 67% in my local county in So.Cal.  however, some end up being bid higher.  One big difference can be whether its an investor looking for a quick cash deal to turn it around and re sell it, or if they are looking for a rental and can pay a little more, or if someone has the cash to buy as a primary residence.  I've helped someone use a private money loan to purchase, 80% of value, to then refi to pay back the private lender and take a traditional mortgage.  They still bought the property with a $100k equity even at 80% of the property value, so it can all depend.

Quote from @Emmanuel Fregene:

Hello! Any Real Estate Agents in here that deal a lot with sellers facing pre-foreclosures? I'm particularly interested in buying in Cobb County or Gwinnett County. Thanks!

Hi.  I have a community of agents in my pre-foreclosures masterclass course that I have, I just shot everyone an email to see who might be in that area.  If I can find you one I will let you know.  

Hi, yes it's about building a relationship with a title rep.  I found a great title rep from attending meet ups, built the relationship from there, he'll get me title reports whenever I need them now as all my business goes through him when I list or close deals.  

Quote from @Account Closed:

Quote from @John Slater:

Quote from @Account Closed:

Quote from @John Slater:

Quote from @Account Closed:

Quote from @Dennis Nikolaev:

 is it short sale agent or short sale attorney?

what do I do with the agent I have e now?

@Wayne Brooks 

@Account Closed
You’d suggest bk instead of short sale?  (If he needed to short) curious why? 

For a couple of reasons.

You can't get blood out of a turnip.

He states: "I am facing a foreclosure on both of the remaining properties. All of my life savings are gone."

He has no money. If he is successful on one short sale, there is no guarantee on the second. He has other creditors who are going to start going after him. He hasn't stated, so we don't know if any of the loans were recourse. That would be very bad. Obviously he has tried the best thing and that is to sell. That isn't working. From an asset preservation point of view he stops making payments immediately. Bankruptcy saves the lenders from losing even more money during a prolonged foreclosure. It puts the inventory back into the marketplace much faster. Few know this, but you can still negotiate with the bank in bankruptcy and some people end up keeping their property. All collection harassment stops by law giving him relief. 

If he doesn’t file for bankruptcy and holds on for a little while longer while getting the 1st short sale and then is forced into bankruptcy anyway, it is conceivable the trustee will seek a "claw back" on preferential payments complicating both his and his previous lender's life. And so on.

A single short sale (in this particular scenario) simply puts a band-aid on a severed foot. We want him healthy and whole and productive. As long as he is in this situation he can’t possible get to that point again.

But, I may have missed something. ;-)

@Account Closed I just shot a bk attorney friend the hypothetical scenario.  They are investments properties so lender could go after any deficiency.  

That was the sense I got, too.

Chatted with a bk attorney just now to get clarification.  First option would be to short-sale if that is what is required.  Short-sale being the better of the "lose" the property scenarios.  Deed in lieu, foreclosure being both worse on the credit than a short-sale.  Because they are investment properties, the lender could issue a deficiency judgement.  Cali is a non-recourse state, part of the short-sale negotiation could include the lender not pursuing the deficiency, however if the lender was to pursue it, then filing bk7 would be an option to be absolved from the debt.  Filing BK first, including the properties in the bk absolves from the debt yes, but then the lender would have to issue foreclosure notice as @Minna Reid already said.  Now you'd be looking at a bk and one, or two foreclosures on your credit.  Deed in lieu would deed the properties to the lenders, but its still a foreclosure.