How do I make offers on Pre-Foreclosures?

Question

I am currently in San Diego and want to find a property near SDSU to house hack. I have enough for a 20% down payment on a $450,000 house so I was think rehab fixer or flipper for get a deal with a preforeclosure. Any ideas or ways to go about this?

Gregg Watkins · Answer

Kyle - NODs are published, so you can get them from various publications. The easiest way is from your Realtor or a title rep. You'll need to start developing a team, including a Title rep. Your Realtor will have Title rep contacts.

Ray Alsaigh · Answer

Hey Kyle,

Buying a fixer in my opinion is one of the best ways to get into Real Estate. It allows you to add value and establish equity from the get go. Especially if you plan on living there, you can make minor repairs as you go as well. However, you might need to use cash or hard money in the beginning to acquire the property since banks usually don't lend on fixer uppers (Varies based on the property and your relationship with the bank). You should be able to refinance once you're done with the rehab so I would suggest start looking into that. If you need help finding fixer upper properties in San Diego, feel free to reach out. I will be more than happy to help as I do work with a brokerage called NetWorth Realty which specializes in sourcing distressed properties to investors.

Best of Luck! Ray Alsaigh NetWorth Realty of San Diego DRE# 02120331

Justin Hammond · Answer

@Kyle Fairbanks If you are trying to get into the preforeclosure game, you need to get a list of all the sale dates in your county (or counties you want to invest in). You should get a new list every day or week. Take that list and go knock on doors, skip trace the names to find phone numbers and cold call/text. If you can't get a hold of them knock on the neighbor's door. Rinse and repeat until you disposition every lead. That's how I got started. Keep in mind there will be tons of other people doing the exact same thing, so you'll have to out-work and out-think them. Best of luck to you!

Kenneth Donaghy · Answer

@Kyle Fairbanks have you been preapproved? Have you considered a 5% downpayment? I just help a client purchase a live-in flip househack near SDSU a 3bd/2ba 1300ish sqft with a 8000ish sqft flat lot for plan of a future ADU, in a great location, with a 5% down conventional loan with a purchase price of $645K. I mention this to help set expectations, and encourage you to look into your lending options.

Alexandre Marques dos Santos · Answer

@Kyle Fairbanks

I encourage you to read about recasting.  Theres a forum here in BP that covers this topic and would be the best choice if you got an extra cash to put on the property.  The guy explained very detailed what is.

Good luck

Matt Nico · Answer

@Kyle Fairbanks

You would be crazy to put 20% down on your first deal. Put 3.5% or 5% and get an owner occupied house. Rent the rooms out and save up that 5% back up and THEN go the 20% down route. Or wait a year and do another 5% loan. I did this 4 consecutive times. 5% each time.

Also for your first ever purchase, keep the rehab small. Start with paint, carpet/flooring, and maybe other cosmetic things. Then ramp up on each additional house. A full gut rehab is tough. Its even tougher when you have never done it before.

Good luck!!!!

-Matt

Kenneth Donaghy · Answer

@Kyle Fairbanks it sounded to me you were forcing appreciation by upgrading the property too.

Kyle Fairbanks · Answer

@Kenneth DonaghyThis might be a move... 15% on 600,000 ish property. I can pay more then the monthly mortgage payment each month to get equity quicker right?

Kenneth Donaghy · Answer

@Kyle Fairbanks If PMI is to heavy in your thought process, you will refi once you have 20% equity, as soon as 6 months. I like living there for two years, then you can take advantage of the 2 out of the last 5 year rule if you sale, and will not have to pay capital gains tax up to $250K

Kyle Fairbanks · Answer

How can I go about finding the tax records, title reps etc. to find the houses with NODs? Thank you for your response!

How do I make offers on Pre-Foreclosures?

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