Newbie Needs Advice... Just Doing It - Posted by ELee

Posted by Jim FL on April 04, 2002 at 13:21:39:

ELee,
Good to see you are entering into this business.
I’ll try to give you some help, but first, there is one thing that I think you may want to consider changing.
In the beginning of your post you sated:
“I have gotten some good information on finding properties and have began to test the waters but I have some questions.”

With that statement, it indicated that you are looking for houses.
Don’t!
Look for motivated sellers.
Some of the ways you desribe will do that, but I’d not limit myself to just a few mothods.
Market heavily and get the word out in front of as many people as you can.
You want two key things in front of as many people as possible.

  1. What you do? (you buy houses)
  2. How to get ahold of you? (Your contact info, like phone number, e-mail and/or webaddress)

When 10,000 people see this message consitently, surely someone in that bunch will be a motivated seller.
Granted this is a shot gun approach, but it works, trust me.
The other way to accomplish getting motivated sellers to call you is by targeting your advertising.
You have some good ideas presented already, so lets take a look at them now.
You said:
“1. I found a vacant home in my area that needs alot of work
and the owners live out of town, what is the best way to
approach the owners in regards to their property.”

REPLY:
Frankly, there are surely some folks here who will tell you “The best way” to get ahold of these people.
You will not know the best way until you use one and see which works.
For me, I try to contact them with a letter, typed up by me, from me personally, and hand addressed.
This letter simply states that I saw their house, located their names thru public records, and that I am interested in buying property in the area of this home. If they are willing to sell the home, please contact me so we can discuss it.
I try to make the letter very friendly, and open.
If this letter fails, I send a followup letter or post card, and even call them sometime.
You may be able to find their number thru a search online, or by talking to neighbors of the house.
Talking to neighbors will also help you gather info about the home itself, as in how long it has been vacant, and perhaps why?

You then said:
“2. In a conversation on last evening a friend mentioned an
acquaintance of theirs that just lost there home to forclosure.
How should I approach them, is now the time to
get a power of attorney and the authorization to release
loan information from the owners so that I can communicate
with the bank directly in an attempt to obtain the property.”

REPLY:
The first thing you’d need to do is talk to the people who lost the home and find out more info.
If they already lost the home to foreclosure, this means that the lender foreclosed and the home was sold at auction already, therefore they do not own it, whoever won the bid at auction does.
In this case, it would most likely be the lender, and you’d need to talk to them or their RE broker about buying it. Never a fun thing to do, but maybe a profitable way to buy the house, if you have resources to do so, or can get them.
If the people your friend knows are just facing foreclosure, meaning the foreclosure is not final, you would then need to authorization for to relase info regarding the loan signed by them at the very least, to gather info on arrearages and reinstatment fees etc.
Talk to the people first and see what the status is.
There also may be a redemtion period in your state, so check state laws on that as well.
If there is one, then after the date of the auction the sellers may be able to buy the house back for the amount of the judgement. They can sell you this right, and you can buy it back sometimes.

You also said:
“3. I go to the county courthouse and investigate properties
that I find vacant and want to persue but am unable to get
information on pre-forclosures can someone give me some info
on where to look for pre-forclosure info.”

REPLY:
The courthouse is one place.
You can look up Notices of Default, or Lis pendens that were filed by the lender. This is public record, and is filed when the lender is going to foreclose.
Some deals are found this way.
Also, perhaps talking to some local lenders, who lend on B and C type credit folks will often give you information, or put you in touch with barrowers in default. I have some now that call me when they have barrowers in default who contact them about deeding the property back to the lender. Since the lender does not want the property, and would rather have a performing loan on their books, they will often work with me to get the loan performing again, as long as the barrowers deed the property to me.
You can then contact the sellers and see if there is a deal to be had.
If they are opened to selling, you may even be able to talk to the lender and get some short sale info, or perhaps buy the defaulting note, or even restucture it sometimes with the lenders consent, since it solves the lenders and the sellers problem.

Bottom line, all of the above work, if you do.
You need to keep as many lines in the water as you can at the same time to get motivated sellers to call you.
There are other reasons people may need to sell as well, like inherited property, divorce, bankruptcy, judgements, job loss, job transfers, relocations etc.
You can use the public records to determine who these folks are and contact them as well.
Also keep getting the word out that you buy houses to anyone willing to listen.
Netwroking has brought me a number of deals as well.
I tell EVERYONE what it is that I do. (I Buy houses)
My message comes from me verbally, and is reiterated by me passing along a business card to ALL the people I talk to daily.
I leave my message out there consistently, and as a result, my phone rings fairly well most times.
There are slow times, but along with that there are times when I simply cannot keep up.
It goes in cycles, so knowing this, I just keep my message out there in front of as many people as I can on a consistent basis.
If you market beyond your comfort zone, the calls will come.
Those times when you want to watch television, or surf the net reading websites etc, scall back some, or don’t do it at all.
Use that time to get your message out.

I hope this helps some.
Good luck,
Jim FL

Newbie Needs Advice… Just Doing It - Posted by ELee

Posted by ELee on April 04, 2002 at 11:05:03:

I am new to REI and have been reviewing information on this
site for about the past month. I have gotten some good
information on finding properties and have began to test
the waters but I have some questions.

  1. I found a vacant home in my area that needs alot of work
    and the owners live out of town, what is the best way to
    approach the owners in regards to their property.

  2. In a conversation on last evening a friend mentioned an
    acquaintance of theirs that just lost there home to forclosure.
    How should I approach them, is now the time to
    get a power of attorney and the authorization to release
    loan information from the owners so that I can communicate
    with the bank directly in an attempt to obtain the property.

  3. I go to the county courthouse and investigate properties
    that I find vacant and want to persue but am unable to get
    information on pre-forclosures can someone give me some info
    on where to look for pre-forclosure info.

Thanks in advance for your advice.