Posted by Robert on July 18, 2002 at 07:27:17:
I am curious about your views of buying properties from the owner before the auction. Aside from the cost, complexity and urgency of uncovering all the unknowns, it appears that pre-foreclosure deals can be quite lucrative…some property owners are simply willing to give you their house to get out from under and avoid the foreclosure. What I have found thus far is that oftentimes properties are heavily burdened with mortgages (firsts, seconds and even thirds)…as in no equity and carrying other liens; i.e. delinquent taxes. Knowing when to walk away is key. For as long as you do your homework and know when to pass on a deal, I am thinking that pre-foreclosures is a great area in which to specialize. The difficulty I have found with REOs as a beginner is the added cost/process of an intermediary; i.e. a real estate agent. I would prefer to deal directly with the bank; in many if not most cases that opportunity is mitigated by the property being listed with an agent. Please know that these are rookie observations; I am new at this, so my interest is driven by a desire for ongoing education. Your views and input are highly valued. Thanks!