All Forum Posts by: Ibrahim Hughes

I know a lot of investors like to get in contact with the owner first but when it comes to something being abandoned, I like to first do my homework. I tend to over analyze things myself which actually got me into a good habit of doing basic research on a property before I contact the owner.

If a property is truly "abandoned" ( be careful with that word because some folks who haven't necessarily abandoned a property will take offense to you suggesting that they abandoned their childhood home. It's almost like accusing them of abandoning their child when they simply left them with the babysitter a little too long) then best believe there's a story behind it. Get the facts first for two reasons:

1) you want to First make sure you know who owns the property and this will help you confirm ownership. Sometimes Banks take ownership of properties or the seller has recently sold it and tax records haven't yet caught up to the transaction.

2) you can confirm that there's equity there and that the property isn't overencumbered with mortgages and or back taxes. Therefore you make sure your time isn't wasted trying to track down the owner. The last thing you want to do is spend weeks or months trying to track down an owner for a house that's underwater.

3) most importantly, you now have the facts as to exactly what's going on with this property. When you finally talk to the seller you can combat any objections the he or she might have based on false information.

We're dealing with a seller now regarding a property in a hot city right outside the airport. He tells us that the bank owns it. We do our research and find out that the bank is barely halfway through their foreclosure. On top of that there's a ton of equity on the property. So of course our biggest battle now is overcoming the objections of the property owner/heirs and try to get them to understand that they're sitting on a ton of equity.

So I say Get the facts first and then get in contact with the owner.

I agree in that it will go to foreclosure and eventually be sold at auction.

Just a note as I specialize in abandoned properties. And this is only applicable if you're looking at this as a possible opportunity:

There are (almost) always heirs. They key is finding out how much is owed and finding the heirs.

I come across situations like these every now and then and typically bypass unless I find out that there's a lot of equity in the property. Then I go to work tracking down heirs. After all it's only worth doing all of that work if there's something in it for both you and the heirs.

So how much is owed on the reverse mortgage?

I agree with @Kathie Russell. I've been wholesaling for a number of years along with several other strategies. It can be very difficult particularly when it comes to crunching the numbers. That's probably the hardest part. Unless you have prior real estate training of some kind, determining the arv, FMV and repair cost will be challenging. As will working with shrewd game playing cash buyers and getting them to close on time.

Additionally if there are any title issues with the property (like most of our deals) then unless you have prior experience or your attorney or title company is very Hands-On involved in resolving title issues then you will likely miss out on good opportunities.

A point seldom missed are the new investors who are working with owners in foreclosure. I absolutely do not recommend that a new investor work with an owner in foreclosure. There is so much on the line and someone who doesn't know what they're doing can potentially cause the property owner to lose everything. I've seen my share of horror stories.

Finally, if you're young, without a family and not dealing with foreclosures then yes winging it and learning as you go can and probably should be done.

But if your time is limited and you have a family at home then the *right* mentorship or coaching will flatten your learning curve and expedite a lot of the trials and tribulations that you really don't have the time for and your family can't afford.

@Mike Schorah

I'm a buyer in New Jersey and it wouldn't bother me at all. Nor would I be looking for that steep of a discount. Our offers are pretty competitive regardless of the situation.

@Rene Bee

Try Abdullah Johnson, (973) 479-1441

He knows Newark very well. Let him know I referred you.

@Tom Gimer

Thanks much! I totally missed your response somehow. So would it be my attorneys job as the potential seller or would it be the sellers / debtors attorney's job to submit my offer to the trustee?

Any tips on getting it accepted by the trustee outside of price? Maybe submit with an appraisal?

@Chris Seveney

Interesting. I have seen BK cases sell through a Realtor. But you're right as it still wasn't off market.

Thanks.

I generally purchase tax delinquent properties. And some of my better deals tend to be tax foreclosures.

However one deal that I was trying to purchase ended up going into bankruptcy by the seller. There were a lot of title issues and a state court-appointed deadline that had to be met. The deadline was missed by one day and so the seller, in order to avoid losing the property, filed a bankruptcy. I'm assuming a chapter 7 but I'm not sure.

It was a vacant non-owner occupied property that they had inherited from their father.

Nonetheless the trustee ordered the property to be sold at auction. The seller's attorney says that he submitted our contract to purchase the property but the trustee decided to go with hiring an auctioneer.

Although he's very well versed in tax foreclosure, my attorney is not familiar with bankruptcy. And I'm wondering at this point if I had an attorney who really knew bankruptcy, could he have fought harder for me to have purchased the property.

Does Anyone experienced in bankruptcy deals know if this is the case?

In our Market, most properties that are purchased are older and in that date range. But it doesn't matter as long as their mechanicals (electric, plumbing etc) are renovated.

I would definitely say yes. Also highly recommended is the cash flow 101 board game for pre teens - adults and cash flow for kids for younger children.

It's a great way to teach young people how to be financially responsible and savvy.