I have bankruptcy leads. Now what?

Question

I have a list of dismissed bankruptcy leads for Chapter 7 and Chapter 13. I want to send direct mail out to these leads. Who exactly will I need to send mail to? What does my letter need to say to people who have been dismissed in the bankruptcy? What is the best exit strategy for investing in bankruptcy leads? And what do I need to be cautious for when buying these types to properties?

Account Closed · Answer

How do you know they own properties?

If they filed BK and owned properties, they most likely are in arrears and you'd need to bring them current to stop a foreclosure. Complicated stuff. I did that for about 15 years though, it can be done but not by a newbie without losing a lot of money.

Account Closed · Answer

@Tony Marcelle I admire your initiative. Here is what you need to know: People who have filed BK rarely have money, so they will need "cash for keys", a few thousand dollars to make a move. They may be willing to do "Subject To" but you would have to bring any arrears current on the loan. Usually that is 6 months to 12 months payments plus late fees, plus legal fees in a short amount of time, if they filed BK to stop a foreclosure. The bank may have a sale date set that the bank was waiting for the court order to dismiss.

Sometimes a property has two owners and only one person files BK. That gets kind of complicated. You will find that most of these houses have deferred maintenance since they obviously had large debt and little income causing them to file BK. You wont know what needs to be fixed until you get there.

Most people are very sensitive about giving out any information when they are going through such stressful times. Most people are going to think you are one of a dozen creditors now trying to collect.

You have to be pretty well financed to do bankruptcy and foreclosure properties. And now, with Dodd-Frank and the S.A.F.E. Act, you have to be careful how you handle the people, information and financing. That being said, you are on the right track. You need two things. Knowledge and plenty of money. I made my first million doing foreclosures and bankruptcies. (I posted my letter that I sent out to everyone in foreclosure elsewhere on the blog.) See if there are any doctors or dentists or businessmen in your area that want to be private investors. regards, Ken

Account Closed · Answer

I guess it is time to clarify terms:

Pre-foreclosure is when the borrower is behind but hasn't gone to sale. The borrower still owns the house and can sell it as normal. Most people call this stage "foreclosure".

Foreclosure is the act of selling the property at auction. At a foreclosure sale, the owner loses his rights to sell the property and the bank takes over ownership if no one bids at the auction. The borrower no longer owns the house.

After the auction, if the bank winds up with the property it is called REO. (Real Estate Owned)

"Is there a such thing as buying bank owned foreclosures before they get listed?" Maybe. After the sale it takes a month or two for the bank to put the house on the MLS. Those are called REOs and it is hard to get a bank to sell a house before an agent gets it listed (for various reasons I won't go into here) However, these are cash/cashier's checks transactions only. It is very hard to get an REO department to return your phone calls and then when you finally get someone on the phone they claim they know nothing (like Sgt Shultz from "Hogan's Heroes") and they direct you to the real estate agent.

If you want to buy foreclosures and make money at it, I will PM you my web site so you can see the various programs I offer to teach you how to do those along with other things. Other than that, the amount of expertise to do what you want to do exists somewhere at BP, but I wouldn't think it would handle things sufficiently to make you any money. You need direction and teaching on this one. Ken

Account Closed · Answer

Actually, I said I made my first million (not millionS) buying foreclosures Subject To. Accuracy is important. Buying Subject To does not bring the loan current. Only a cashier's check for the amount of arrears, quoted in writing,  properly delivered to the proper entity by the cutoff date, brings the loan current.

Anyway, I don't think I have ever bought an investment property from the MLS. If I did, it was so long ago I wouldn't remember. Of course the foreclosure is listed for everyone to see. It is intended to be public to generate the highest bid. That's the law.

Sometimes people use their first name on a document and their middle name on a different document and sometimes it is a family member. There may have been a Quit Claim Deed transaction somewhere along the way adding or removing someone from Title. There are all kinds of vagaries when buying foreclosures. Get a Title report. That is the only way to know when buying pre-sale.

Account Closed · Answer

Yes. It is very time consuming. Whether it is worth the effort depends how much $$ you have to work with. If you have to find a private lender, it will take too long. What amount do you have to work with before doing the emailing?

Tony Marcelle · Answer

Account Closed Sorry about the typo. I meant million. Is there a such thing as buying bank owned foreclosures before they get listed? The reason I brought that up is because I read through a course that teaches how to do that. I personally have not heard of anyone buying unlisted foreclosures. I gave it a try to see if that was possible. It is not possible in my area. Yeah I looked through tax records and never saw the person in bankruptcy in any of the previous years. I searched all the way back to 2003.

Tony Marcelle · Answer

Account Closed Thanks. Is "subject to" the recommended option to bring any arrears current on the loan? Would a lease option work or not work in bringing loan payments up to date? I just so happened to look at the name of one of the people on my bankruptcy list and found that person's name does not match the name in the tax records or public records as being the owner of the house. The last name is the same as the actual owner of the home but first name is different. I am guessing this is another family member who owns the home. Why is it the person who filed bankruptcy is not listed in tax records or public records? When you made millions in foreclosures, were you buying those foreclosures while they were listed in the MLS? I want to buy foreclosures too, but it is hard to get a good deal when it is listed for everyone to see. The only funds I have is transactional funding, which they will let me use to buy bankruptcy homes.

Tony Marcelle · Answer

Account Closed I have very little to work with. I got bankruptcy leads from pacer.gov. I have the people's names and addresses along with other information. I was going to use the person's name who filed bankruptcy and see if I can find a match between that person's name in the bankruptcy case and the name of the of the person found in my county online public records. All that I can do for very little money.

Tony Marcelle · Answer

Account Closed Is this something that can be found out with a look through public records to see if the person who filed bankruptcy is named on the deed?

I have bankruptcy leads. Now what?

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