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Updated over 16 years ago,
questions on NOT's and whom I should approach...
The homeowner gets whatever the property garners at the auction above the debt and processing costs of the lender, correct?
And I understand the pro's use a general 70% rule of thumb for bidding. So it should be relatively safe to say that a property will sell for approximately 70% of it's after-repaired market value, or more - right (unless the lender buys it back, of course)? Mind you I'm in the Los Angeles market so it would be different than some other areas.
When hunting the NOT listings for upcoming sales hoping to find a door I can knock on, I would like to narrow down the number of doors that are to be knocked. I know that some would be a waste of time for me and the homeowner. To narrow this down here's my approach...
If I want to beat out the pro's at auction I would look to offer 80% (generaly, a couple of weeks before the sale was scheduled). I would base my criteria for which properties I can make offers on by dividing my max purchase price ($375k) by 80% (= $468k). I'm thinking I should avoid properties that are outside this 80% guideline. I see this as a win for everyone at this point in the process. Am I missing something?
Is what I'm doing a reasonable way of going about this? Have I missed anything major in my calculations or plan? Currently this will be my first and primary residence, but I'm looking for a place I can develop - which is my long term goal. Start with this one to get some capital going. Anyhow, any input would be appreciated.
Thanks,
JB