Buying Homes in NOD or piror to Trustee Sale Dates

[Joel Mallo]

Ok everyone so I have some questions regarding approaching individuals in the pre-foreclosure (NOD) or (NTS) stages. I've been in mortgage banking for quite some time now and have many past clients who have had their friends or relatives reach out to me for help. Some of these homeowners had a lot of equity in their homes, but couldn't refinance because they were in default and as many of you know, guidelines are not that friendly when you've been so far behind on your payments. The alternative was then hard money or alt programs, but then again, these loans are usually unaffordable on a long-term basis. Another option is applying for a loan modification, however, some of them are self-employed and can't qualify, so the only other option would be to sell their homes. Since I've currently been exploring Real Estate investing how would some of you handle these potential prospects? I certainly don't want to take advantage of the situation, however, if there is an ethical approach to help them and allow the opportunity for me to invest, I would love to hear from the community. In the past, I just referred them to an agent who would attempt to get a listing period (holding off on foreclosure) from the lender and try to sell the home at present market value. Some of these homeowners let the homes go to trustee sale and sell for less than the value, but still above the default amount creating an overage for the homeowner, however, what if this could have been avoided or approached differently. I feel if there was a way that I could invest, if the property is right and also help them avoid a foreclosure, it could be a win win for everyone involved. Some of these appeared like they could have been great opportunities to flip. How do you determine what a fair price would be to purchase the home from the homeowner in distress, but still leave some room for profit. I would just hate to have anything come back legally for taking advantage of the equity because the homeowner was in a vulnerable position.

[Account Closed]

@Joel Mallo,

I've done this. You have two options.

1) Get your real estate license and help the owners to sell the property for the maximum value the market is willing to pay and collect your commissions. They're quite sizable where I live.

2) Get investors to back you up with the funds and agree to buy the property from the owner at 80% FMV less repairs if the property fails to sell in 30 days for whatever the price you and the owner agreed. The investor can buy it from the owner, put lipstick on it and then flip it. These investors can be found at the courthouse steps.

In all cases, I was able to help the owners sold their home on the open market, and they walked away with the most amount of money. Your heart has to be in the right place, which is to help others. The fact that I didn't need the money to live on at the time so my intention was genuine. Some sellers thought I was a saint. Some even cried with joy when the transaction closed. It was one of those feelings of satisfaction to be able to help others I'll tell you that.

If you help others get what they want, you'll get everything you've ever wanted. I was also a trustee sale buyer at the court house steps at the time too so I was able to explain the foreclosure process fluently with the homeowners. I've moved on to different pasture at this point so I'm just sharing my previous life's experience.

Best of luck.