Should I pursue any further - Posted by Eric P. Martin

Real Estate Investing
1

Posted by Ronald * Starr on June 25, 2001 at 16:16:38:

Eric P. Martin-------------

Yeah, you’d have to pay off the loan and all the back expenses, unpaid interest, etc. Best to wait for the foreclosure sale. Then, assuming it goes back to the lender, you can talk to them about buying it.

Forget talking to the owner unless this property is maybe worth three or four times the loan amount.

You could help people give you advice if you would give them an estimate of the market value of the property, fixed up. And an estimate of the cost to fix up. Or else an estimate of the current market value.

You may not have done your “hunderd houses” research, as recommended by Bill Green in “Think Like a Tycoon.” If not, get out there and see at least that many houses for sale. I recommend keeping a book with information on them and then later add in the sales prices. You will then know the market value for homes and will not have to guess at what you are doing.

Good InvestingRon Starr*********

2

Should I pursue any further - Posted by Eric P. Martin

Posted by Eric P. Martin on June 25, 2001 at 14:57:24:

I’ve been looking at this 3 flat in my neighborhood that seems to have some fire damage . I went down to the Assessor’s office today and tried to find the owner of the property. What I found out is that it’s in foreclosure and has been since Jan 2000. When I called the collection agency trying to find the owner and they said that normally foreclosures take about 9 months. I was wondering why has it not went to the auction block yet?

When I was at the assessor’s office, I did see that it was bought back in 1990, so were looking at possibly 10 years of equity if there are no other loans out on it.

As I was looking into the computer, I noticed a price of $135,000. This could have been the price of the loan. With this info, should I try and pursue the owner any further?

I do think that I’m learning a lot as I go but I don’t want to spin my wheels if nothing is there.

He is another question. Let’s suppose I was able to find the owner, would I have to satify the entire amount that is due on the loan if bought?

If I have 10 years of equity built up, the market price of let’s say 135K, fire damage… worst case sernario, full rehap is needed… would this be a good deal or is more info needed?

Eric

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Re: Should I pursue any further - Posted by JT - IN

Posted by JT - IN on June 26, 2001 at 06:08:26:

As Ron * said, you didn’t provide enough info to give the answers that you are looking for.

As for the question regarding the time frame on the FC, when fire damage is involved, many times there are problems with the insurance claim, and possible litigation over same. The lender will usualy wait to see how this turns out, as it is best for all if owner, with the assistance of insurance proceeds, repairs property, and returns to productive rental and begins repaying mortgage. Absent that happening, which would be my guess here, then the lender has no other choice, besides a charge-off, but to FC on the mtg.

As suggested, probably best to wait until Sheriff Sale, and possibly consider buying the property at auction. There is currently NO negotiating that the lender can do, as they have no ownership rights until the sale is completed. Just as a matter of gaining experience, if you could track down the property owner, you could see if he is willing to deed over property, and then armed with this info, contact the lender, just to see if they are wiling to do a short sale, (partial charge-off), for less than is owed.

Situations like this one, do hold a fair amount of risk, compared to buying a property that is fully functional and profitable. You could easily buy one of these, not having all the facts and accurate estimated costs, and end up with a lot more $$$ invested to fix, than market value would justify.

Good Luck on this and others…

JT - IN