Making an offer to the owner on a pre-foreclosure

[BrannDon Albert]

I think this might be a relatively basic question, so please forgive my naivete if that is the case. So I can see on Zillow the loan amount for the most recent time a home was purchased (in this case $371k). I can also see that the lender has been served a notice of default. The Zestimate for this property***** (<-- those are my grains of salt that I take with any Zestimate) is ~$480k (IOW, a difference of over $100k). 

Here's me question. This person is obviously in financial straits given they are in default. Is it reasonable for me to think that I could try to get in contact with this person and make them an offer for say $390k, which satisfies their note but is still WELL below the market value of the home itself? Is that a jerk move on my part? Do I not care if it's a jerk move because the might just accept and, condition dependent, I would have ~$60-80k in after rehab equity on the property??

[William Hochstedler]

Yes. This is roughly how it's done.

It's not a jerk move.  You are providing them a solution that would allow them to avoid foreclosure.  

Be open and honest with them.  You are a cash investor who buys property at a discount.  You understand that their property may be worth more but you are only able to offer them a certain amount and close quickly that will allow them to avoid foreclosure.  You are simply giving them an option when they probably don't have very many.

If you are able to make contact and they turn you down, make sure you follow up.