Pre-Foreclosure Strategy - Distressed Single Family- Buy & Hold

[Ernesto Duran]

Question for the group:  What will be your strategy in this case, if it exist?  Property for sale for $150K (single-family), but the property is pretty distressed.   The comps are roughly $160k-$175k for an updated property.  The estimations of rehab are $80K+.  The plan for the property is to hold as a rental.  Simply, I wouldn't want to purchase for more than $50K.   The owner is in pre-foreclosure and owes about $100K to the bank.   How would you acquire this property ensuring you have instant equity with the potential of decent cash flow?

[Jonathan Greene]

You aren't getting it for 50k, the bank will never do that, and if they do it will be in years, not days or months. This is a great example of a property not to waste any time on because the payoff cycle is years-long. It goes from preforeclosure to short sale (price comes out at what the agent thinks, then once they have an offer, the banks sends for a BPO and sets the price based on that and what is owed, which can be higher and reset the deal). If it fails as a short sale, it goes to courthouse steps auction. With that upset value, it won't sell so it finishes as an REO where the lowest price will be.