HELP! Answers for 2 questions

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HELP! Answers for 2 questions

Rebecca Morrell
Real Estate Investor · Portland/Falmouth, ME · Member since 2010 · 17 posts · 1 vote

Hi, everyone!

First-time investor, I have been researching for 2+ years, and I am ready and chomping at the bit to get started...

Initially I was headed toward foreclosures, then pre-foreclosures, and now I am thinking that flipping/wholesaling short sales is really what I am looking to do; would someone mind clarifying for me?

I want to:

1.) Find a property with owners who are financially distressed (with a not too physically distressed property for my first sale)
2.) Purchase the property at a substantial discount
3.) Sell it very quickly for a profit

Additionally, I need my own financing, which I hope to secure through a hard money lender so that I can re-sell quickly.

Now my questions are:

As far as the actual sequence of events once I find a willing homeowner, is this correct?

1. Meet with owner, decide if short sale is best option for them
2. Determine what liens/encumbrances are on property (Are there any other ways to find them all aside from a title search?)
2. Prepare offer packet/send to bank
3. Close

Also:

How can I find and line up buyers BEFORE I even purchase the property? I'm thinking that the type of buyers I'm looking for won't be other investors, because I'm hoping that the house I purchase at a discount will be in good enough condition to fetch market value from a conventional buyer once I resell... Can I put the house on the MLS before I own it, in order to have a buyer lined up immediately after I close?

And:

Aside from putting up car and bandit signs (which I won't be comfortable with until I have a little more experience) WHERE do I specifically find homeowners who might be interested in selling their home in a short sale which I can orchestrate? I am comfortable doorknocking, I just don't know whose door to knock on... People who have Lis Pendens filed I can find through public record, but are there other ways? Is it unethical to try to find a local public support group for people in this situation and try to offer help by means of purchasing?

Any help here would be incredibly appreciated!! Thanks so much :D

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Dave Grosse
Wholesaler · Belleville, IL · Member since 2009 · 206 posts · 44 votes
16y

Hi Rebecca and welcome to BP!


I want to:

1.) Find a property with owners who are financially distressed (with a not too physically distressed property for my first sale)
2.) Purchase the property at a substantial discount
3.) Sell it very quickly for a profit

yep, in a nutshell, that's right.


Additionally, I need my own financing, which I hope to secure through a hard money lender so that I can re-sell quickly.

Preferably, you'll want to get your hands on transactional funding - you can find a few people here on BP who offer this or just do a google search. Hard Money will come into play if you are forced to hold the property for any length of time.


As far as the actual sequence of events once I find a willing homeowner, is this correct?

1. Meet with owner, decide if short sale is best option for them
2. Determine what liens/encumbrances are on property (Are there any other ways to find them all aside from a title search?)
2. Prepare offer packet/send to bank
3. Close

I would determine the liens on the property first and try to determine what you should be able to sell the property quickly for, then talk with the homeowner over the phone if you can to feel out their situation and determine if they have a real hardship. You could meet with them in person but you may just end up wasting a lot of time driving.

Theoretically steps 3 & 4 are correct here, but in between these steps is where all the real work begins. Make sure you have a good negotiator on your team My parents and I started "doing" short sales this time last year and haven't closed one deal yet - we've had about 6 or 7 fall apart mostly due to a lack of knowledge of the art of negotiating. Basically we suck at it :roll: and you don't want to waste a whole year like we did trying to figure it out.

The two guys on BP that I know offer professional negotiation services are James Ward and Scott Hubbard. I am working with James and he is AWESOME, and even though I haven't worked with Scott , he has provided a TON of useful insight here on the forums and he really knows his stuff.

IN my area, YES you can put the house on the MLS before you own it. My contract basically states that the seller is granting me the right to list the property for sale. You really need to speak with the real estate agents and a real estate attorney in your area to find out how you need to go about it. Of course there's always craigslist, bandit signs, newspapers, etc that you could use too. I prefer to just have my realtor list it on the MLS though - that's what they are getting paid for - you do have at least one real estate agent on your team right?

I think finding a support group would be a great idea - never thought that those might even exist but they probably do. I find most of my leads via the Lis Pendens list(these are the doors you knock on), but we have a few referrals form a real estate agent we know, and you could check with local mortgage brokers, bankruptcy attorneys, divorce attorneys, etc, etc. I think i recall smitnlit putting up a nice list of sources somewhere here in the SS forum.

Hope that helps and good luck!

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  • Dave Grosse
    Wholesaler · Belleville, IL · Member since 2009 · 206 posts · 44 votes
    16y

    Hi Rebecca and welcome to BP!


    I want to:

    1.) Find a property with owners who are financially distressed (with a not too physically distressed property for my first sale)
    2.) Purchase the property at a substantial discount
    3.) Sell it very quickly for a profit

    yep, in a nutshell, that's right.


    Additionally, I need my own financing, which I hope to secure through a hard money lender so that I can re-sell quickly.

    Preferably, you'll want to get your hands on transactional funding - you can find a few people here on BP who offer this or just do a google search. Hard Money will come into play if you are forced to hold the property for any length of time.


    As far as the actual sequence of events once I find a willing homeowner, is this correct?

    1. Meet with owner, decide if short sale is best option for them
    2. Determine what liens/encumbrances are on property (Are there any other ways to find them all aside from a title search?)
    2. Prepare offer packet/send to bank
    3. Close

    I would determine the liens on the property first and try to determine what you should be able to sell the property quickly for, then talk with the homeowner over the phone if you can to feel out their situation and determine if they have a real hardship. You could meet with them in person but you may just end up wasting a lot of time driving.

    Theoretically steps 3 & 4 are correct here, but in between these steps is where all the real work begins. Make sure you have a good negotiator on your team My parents and I started "doing" short sales this time last year and haven't closed one deal yet - we've had about 6 or 7 fall apart mostly due to a lack of knowledge of the art of negotiating. Basically we suck at it :roll: and you don't want to waste a whole year like we did trying to figure it out.

    The two guys on BP that I know offer professional negotiation services are James Ward and Scott Hubbard. I am working with James and he is AWESOME, and even though I haven't worked with Scott , he has provided a TON of useful insight here on the forums and he really knows his stuff.

    IN my area, YES you can put the house on the MLS before you own it. My contract basically states that the seller is granting me the right to list the property for sale. You really need to speak with the real estate agents and a real estate attorney in your area to find out how you need to go about it. Of course there's always craigslist, bandit signs, newspapers, etc that you could use too. I prefer to just have my realtor list it on the MLS though - that's what they are getting paid for - you do have at least one real estate agent on your team right?

    I think finding a support group would be a great idea - never thought that those might even exist but they probably do. I find most of my leads via the Lis Pendens list(these are the doors you knock on), but we have a few referrals form a real estate agent we know, and you could check with local mortgage brokers, bankruptcy attorneys, divorce attorneys, etc, etc. I think i recall smitnlit putting up a nice list of sources somewhere here in the SS forum.

    Hope that helps and good luck!

    1Reply
  • Maryann L.
    Specialist · MA · Member since 2009 · 858 posts · 306 votes
    16y

    Rebecca,

    PM me. I'm looking into expand in Southern Maine. Not sure where you are located, but I'm looking at York County.

    Might be a possible JV opportunity. We have all forms, funding etc. necessary.

    0Reply
  • Rebecca Morrell
    OP
    Real Estate Investor · Portland/Falmouth, ME · Member since 2010 · 17 posts · 1 vote
    16y

    Thanks so much to both of you for the info!

    That's great info, Dave. I'm so surpised at how friendly and knowledgeable everyone is on here, I'm really glad to have found this forum...

    I guess my next step is to dive in and find some opportunities! I'm sure I'll be posting again very soon, thanks again for the responses.

    0Reply
  • Rebecca Morrell
    OP
    Real Estate Investor · Portland/Falmouth, ME · Member since 2010 · 17 posts · 1 vote
    16y

    Hey there again guys,

    smitnlit, just wanted to let you know that I believe I sent you a private message the other day, but I'm still getting used to how the board functions work, so it may not have gone through! Please feel free to message me, and I look forward to speaking with you.

    Thanks!

    0Reply
  • Art Jackson
    Real Estate Investor · Johnstown, PA · Member since 2009 · 33 posts · 0 votes
    16y

    Rebecca, I would encourage you to get familiar with the courthouse in your area. All liens, encumberances can be found in the prothonotary's office. Just give them the homeowners name and they'll be able to tell you if there are any liens, judgments, etc against the homeowner. The tax claim department can tell you about the outstanding property taxes, the recorder of deeds office will be able to tell you about any mortgages. Finally the assessment office will tell you about the assessed value that the property, the tax card, etc. All of this information is public record so you can find out everything you need to know about a property before you decide to proceed to make an offer. In this business this information is called due diligence. Art

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