Originally posted by @Sarah Miller:
I am looking for ways to acquire more properties without using my own money (because I don't have much!). I had an idea of getting information on possible homes/multifamilies in pre-foreclosure status. I can find the owner of the properties and try to track down their residential address. I would then send them a marketing piece explaining how I would be interested in taking the property off their hands for a creative financing situation (maybe a subject-to financing agreement and refinance later somehow). Is this a good idea? Does anyone else do this? What are some things I am naïve about with this strategy?
Great to hear your going for it Sarah,
My team and I started doing this 6 years ago and can vouch for the fact that it is the best way I have used to control property with just a listing agreement. Our approach has evolved over the years, starting with Foreclosure Radar "public record search software" and a $45.00 per month subscription. We searched pre-foreclosure and action property's in Southern California. In the beginning we only listed for short sale the sellers that would work with us. But as the equity position of most home owners has increased most short sales have become equity sales. The trick is recognizing the bank will not extend them any further on the owners outstanding unpaid balance. This is your window of opportunity.
We presently have a number of sellers that don't want the services of a Real estate agent I recommend using because of her distressed property negotiating skills. This is where the investor comes in, I make a standing offer in all appointment to close at one of 3 prices. Price number one is a 7 day close price all cash none contingent, to be honest no one takes that deal. but its important you get that price out there. It is the price you will end up paying, or something close to it. The second offer is a little sweeter for the seller but I ask them to do specific things at closing. Like clean up all trash or fix things around the house. Like the first offer few elect for this option. The third offer is using the agent to sell. Most of the time there is not the proper time, condition, and sense of reality for the seller to use this option.
You have to be wondering why we go through all this, well most people know they have to sell "they never could afford the home" your job is to softly help them come to this conclusion. When done properly it becomes a win/win for both party's. Never take advantage of them, be an advocate for them in this process. They will be the buyers on other homes you are selling once they get on there feet. I heard this somewhere before "if you help others get what they want, you will always get what you want".
Your not naive about this..... figure out what you would need to walk away from your home if you didn't have options or had burnt all the other options you had. Then provide that answer to them and you will be a winner.
