I’ve got a friend interested in this stuff, and since I know a few folks here have dabbled, at least, in this I thought I’d post it here first? Anyone have any experience with these “Buy Foreclosures in your town” type programs? In particular I gather some of them have mentoring type subscriptions for a hefty added fee where they walk you through the details and legalese of making the purchase. I’m fairly skeptical myself, so what I’m looking for ideally are people with first hand experience that I can report back… TIA
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ask Mooney
I don't know about some of these guys but I noticed that in my market area they pulled Armando montelongos tv infomercial. I heard he was being sued whch serves him right as far as I am concerned. I don't care for him or his flip this house show.
I heard from someone that called to buy his "book" which turned out to be a mentoring course for nearly five hundred dollars iirc. They didn't tell this person that is what he was buying until they had his credit card number luckily he was able to cancel the order the next day after he had thought about it.
Webby
"TV Foreclosure"
There really isn't any market in repo'd TV's. All they do is deprecate.
OH!, you don't mean that kind of TV foreclosure.
Well there are 2 kinds of "foreclousure" properties.
One where the bank as foreclosed and obtained titles. That is called REO property. In most cases here is the deal.
1. The seller (bank) won't do ANYTHING to the property. They won't supply an extra key or new light bulb. The only thing that will do is cash your check. They are sold AS IS.
But in a few cases the bank does pay to have the property "repairded" and "upgraded". But that is rare. And it is done before hand and not as requested by a buyer.
2. In most cases the property has been winterized. That means no water. And on some cases the gas and electric is turned off also. They might vary, but I think that you will have to pay to get them turned on if you want to inspect them.
3. The banks will start the listing at "full price". The amount that was owed at the time of foreclosure. Then after 3 to 6 months start lowering the price.
4. The banks take forever plus 3 days before they will respond to any offer.
Other than that it is like buying any other real estate.
The other is buying at the foreclousre auction on the "courthouse steps".
This varies a lot by state law.
But typically it works like this.
The auction is started by a bid for the amount due the first lien (mortgage). More often than not there is no enough value in the property for anyone else to bid more. So the auction stops there.
But if some one else wins the bid then their need cash in hand at that time. Some places might allow 10% cash deposite and maybe 24-48 hours to close with cash. But no way in h*ll can you buy the property with a mortgage. You might do it with a line of credit on other property or any investor.
In some state the orginal owner has a right of redemption for a period of time. I think up to a year or 2 in some places. So that limits what you can do with it. I think. Maybe they would have to pay for any improvements, but I don't know.
In general, unless you "mooney it" ('break in') there is no inspection of the property except from the outside.
And you might end up with not house, but people and "belongings" and you have to evict them. And in the meantime they can wreck what remains of the place.
A friend of mine has bought one REO property. And looked at maybe a dozen other with here.
And been indirectly involved where she was the buyers RE on buying REO houses. In those cases some "minimal" repairs had to be made by the buyers (or in one case the RE agents and mortgage broker paid) to make before closing to approval for FHA mortgages.
Probably the best deals, but often harder to find and complete is short sales.
In those you find HO that are approaching foreclosure and offer to buy them out the amount that the bank will accept. Which is less than the outstanding mortgage.
You can start by finding out where the legal notices are published that give notice of pending foreclosure.
But again it banks are often slow to respond.
William the Geezer, the sequel to Billy the Kid - Shoe
yeah, yeah, yeah........ i thot ole paul was talking about repossessed tv's too
oh wellMike Hussein Smith Rhode Island : Design / Build / Repair / Restore
Thanks Bill... what I'm looking for primarily is feedback on whether anyone found any of these TV pitch guys worthwhile or not. I strongly suspect they're essentially scams but just trying to double check...PaulB
http://www.makeabettertomorrow.com
http://www.finecontracting.com
My FIL is a retire real estate broker. When he was active, he made a small portiun of his money buying from "distressed" buyers. I asked him a year or so ago about how this is best done.Here in NC, and in most other states, property records and mortgage filings are public records. That is to say that those records are available for the public to view on request.And if you know how to look, you can easily find the properties that are "not quite yet" in foreclosure. Homes where the payments are in default, but the legal foreclosure process is not yet complete.He would find those properties, and determine (from the records and from his knowledge of house values) if there was any money to be made. (The records will show the current balance on the loan.) If yes, he'd make a polite call to the distressed owners, offering to talk to them about buying the property.He was never unethical about this -- he always pointed out that his motivation was to make money. But if he could make money, while helping them avoid bankruptcy or foreclosure, then it was a win-win.Sometimes he was able to buy at a good price, and he made money. Sometimes he was asked to leave, and he didn't make anything.His point was that if you can buy at that point in the process, then lots of people are helped. You might make money on the flip. The former HO gets out from under a mortgage they can't afford. The bank saves a ton by not having to complete the process. The neighborhood benefits too.Politics is the antithesis of problem solving.
Bill -
I'll take a little issue with your statement that there's no way in he## you can buy a foreclosure with a mortgage.
We can agree that it's real tough, but not impossible. We had one scheduled for a closing this week where we were getting a 50% loan. It fell thru the day before because of an error in the foreclosure ad. We've already been told that the loan is good if we are the high bidder at the resale.
Don K.
EJG Homes Renovations - New Construction - Rentals
I may not have made it clear.I am talking about buying at the Court House Steps at the find step of foreclosure.And no 'bank' is going to lend money on house when they can even access it for inspection/appraisal. And state laws require cash at the sale.Now some individual might front the buyer and might have mortgage put on the property. But it is hardly a normal mortgage sell.Once the bank or other person "owns" it then the sale is basically like any other sale.And they are often sold with mortgages..
William the Geezer, the sequel to Billy the Kid - Shoe
It was clear.
This property was bought on the steps, at auction. The bank that had the mortgage knew the property and knew the appraised value of what they were selling. they had to sell it because the current owner is not paying the mortgage.
We also happen to be a customer there and it's a real small bank. When we talked to the senior VP (from our branch), he ok'ed it on the spot.
Unusual, I know, and happening less and less. A benefit of living in the sticks.
Don K.
EJG Homes Renovations - New Construction - Rentals
Depends on the borror and the bankers relationship.
I used to do it all the time but not now . I put up a piece of property I already own. Actually now because of that I have a credit line so I can do just that . They quit doing it when things tightened up. First clue I had was when DanT said he had a little resisitance at the bank. That was a year ago I guess. I walked into the same thing right after.
P aul there is a web site if I can find it that gathers forclosed and near forclosed homes across the US. They have all the info you need. I think they charge $40/mth for the service. I will see if I can find.
Found it.http://www.realtytrac.com
Edited 1/9/2009 6:33 pm ET by frammer52
have your buddy send bill 500.00,he tells you what you need to know.
if theses guys knew the secret for making a millions a year,would they sell books?
they can give you a lot of info,but it's all out there anyway.
best thing is to jump in with both feet,look at a lot of houses,make lots of low offers and buy 1 once in awhile.
YOU ONLY NEED TWO TOOLS IN LIFE - WD-40 AND DUCT TAPE. IF IT DOESN'T
MOVE AND SHOULD, USE THE WD-40. IF IT SHOULDN'T MOVE AND DOES, USE THE
DUCT TAPE.
There is nothing on TV from an informational standpoint that is not in the local library. Real estate investment is the same and has been the same for so long that the basic information is always the same. So paying money for a "course" or "system" you are usually paying for a condensed version of information you can get anywhere for a lot less money. Just my opinion. DanT
Its what I do for a living along with rentals from it .
Tell me what you would like to know .
Theres a lot to know and you wont ever know it all.
The best real estate aid is a real estate course or at least their books for your state. We have a real estate course thats two weeks long with an instructor . Thats the best and cheapest advice out there. Lets say you are investing a million per year . Two weeks and a 500 dollar course is a cheap tool. No BS to shift through. Touches lightly on real estate law which is important .
I didnt go to the trouble in another thread because he wasnt going to do the business himself . I guess Ill go to the trouble now .
Investing , flipping , rentals [because you have to have that option to hold properties and this is a time to hold them] is a very intensive learning process. A serious back ground in construction is needed in my opinion and then theres still lots to learn. Years and years worth of learning is necesary. Its no small subject to talk about . The shows about people walking into a repo they bought with a sledge hammer is BS in its purest form. The books and courses seem to be fed to get you motivated instead of sound advice to the true mechanics of the business.
Real estate knowledge and business law is a big subject in the course of the business.
Banking and finance is a big chapter in the business .
To know the ins and outs of how things work in your area are huge . To know values , history and the futures of sections of town in your area can only be gained through your own personal assessments on a daily basis. There may be only one bank in these times willing to loan money and it might only last a couple of months . You might have 8 banks so which one is it? Which agent is it ?
I suggest a strong remodling back ground instead of new construction. Then thats not enough. It would be cheap investment to take a home inspectors course to find out how humble you can be about what you thought you knew and dont . It happened many times to me and it will you . Its one of the most intense knowledge curves in the trades to have to know so many different things that are not related to each other normally. Lets say being a carpenter barely gets one started in the business but if theres not some basics like capentry which is great its almost impossible . The books will say you dont need to be able to do the work. Thats partly true but if you cant do the work you dont have the knowledge to asses before you buy. So at least the knowledge is essential. You cant have the knowledge with out being capable .
Then theres traders and sales books . Training courses. Real courses. To be able to survey those deals . You must know all the options as tools to finish the job of buying and selling . This house over here will take this specific tool that another house will take another. When to use the correct tool is important in these times.
Probably the most important stuff to know you can only gain your self . You need current knowledge of your market and its futures. Its different than mine or anyone elses here. Only you will know theres a plant to be built next year and all the land that adjoins it with its values. So you have to know the business of the town or city and its futures. To be on the board of planning and zonning is an exellent way of knowing whats shaking when and where. That will also give you knowledge of planning and zoning it self and the regulations there. Ill give an example ;
I was on planning and zoning so I knew we didnt have enough day cares. I knew the regulations so I knew at a glance what a property had to have to be approved. I arrived at a large house to to be auctioned later that week. I inspected it and could not place an #### in its seat to own it . It was too big and old to be profitbale for a normal flip but it was in good shape over all. Still it would take money to operate it for residential use. What stared me in the face was a day care . Huge shaded lawn with lots of parking in a section of town it could be approved. The fence was there . Big rooms and a big dinning room and kitchen. While the floor plan was obsolete the floor area was at 3500 sq ft. I didnt buy the house as I should have but turned the information over to my realator as a favor and she found an #### for the seat which she returned the favor later.
Tim
if your buddy wants to do one of theses tv deals.have him pick one that interests him and search ebay for it. lots of people buy these programs and either never open them or watch all the tapes and put it back in the box.
alot of 500.00 programs sell for less than 25-50.00.
first lesson in real estate and i won't charge for it:
make your money when you buy,cause you can never buy to cheap.might as well start with the books.....................
YOU ONLY NEED TWO TOOLS IN LIFE - WD-40 AND DUCT TAPE. IF IT DOESN'T
MOVE AND SHOULD, USE THE WD-40. IF IT SHOULDN'T MOVE AND DOES, USE THE
DUCT TAPE.