Pre-Foreclosure Deal Structuring

[Vito A Carlin]

I used to flip houses (back-in-the-day) from 2004 to 2008. I'm getting ready to get back into the investment game and looking for some help getting educated before launch (I know A LOT has changed). I'm interested in investing in pre-foreclosures. 

Can you advise what typical strategies and/or what options are available to an investor when negotiating pre-foreclosure deals with the owner? 

• Areas to be aware of (cautions of)?
• How do you get them to move out? 
• What paperwork should I have a RE attorney draft up for me? 
• Exit strategies? 

I'm in Southern California. I paid for a pre-foreclosure list from ListSource with the following criteria: owner's having 30% to 80% equity, owner-occupied, and loan payments made for at least ten years.

My objective is to really help people out of a bad situation and turn a profit at the same time (win-win).  

Thank you! 

[Account Closed]

Originally posted by @Vito A Carlin:

I used to flip houses (back-in-the-day) from 2004 to 2008. I'm getting ready to get back into the investment game and looking for some help getting educated before launch (I know A LOT has changed). I'm interested in investing in pre-foreclosures. 

Can you advise what typical strategies and/or what options are available to an investor when negotiating pre-foreclosure deals with the owner? 

• Areas to be aware of (cautions of)?
• How do you get them to move out? 
• What paperwork should I have a RE attorney draft up for me? 
• Exit strategies? 

I'm in Southern California. I paid for a pre-foreclosure list from ListSource with the following criteria: owner's having 30% to 80% equity, owner-occupied, and loan payments made for at least ten years.

My objective is to really help people out of a bad situation and turn a profit at the same time (win-win).  

Thank you! 

 The laws have changed a lot regarding foreclosures. And, actually foreclosures are way down in number. If you insist on doing pre-foreclosures, I know that in Washington State it is a Criminal Act to solicit, mail to or contact anybody who is in foreclosure, might be in foreclosure in the future or even thinks they might be in foreclosure in the future. The civil penalty is paying them back 3 times the value of the property. Ouch! The criminal penalty depends on how many of these you are doing. Needless to say, doing pre-foreclosures some places doesn't pay. Let the borrower lose everything is the attitude.

Don't violate the S.A.F.E. Act of 2008.

The basic California law is at https://www.shouselaw.com/fraud-foreclosure.html and includes stuff like: "Civil Code 2945 and 2945.4 makes it a crime for a foreclosure consultant...that is, a person who solicits or represents that for a fee he/she can help stop or postpone a foreclosure sale...to engage in any of the following practices:" (click link for more)

Anyway, why take the risk? There are so many other, Safer ways to to invest in real estate. I choose to buy "off market" and Use Subject To and Wraps to get better returns. I recently wrote about one I did for an investor a week or two ago. Open your world to other ways than foreclosures - it's Safer to do things like this 

https://www.biggerpockets.com/forums/600/topics/58...

And there are a lot of other options.