Don't know what to do...Here's the situation....

[Matthew T.]

Hello everybody! I have a situation here where I'm confused on where to start. Maybe somebody can analyze the situation and give me some advice on where to start. Here goes the situation:

A motivated seller called me from one of my advertisements. He is an absentee owner (out of state) who has a property in another state (the state I'm in now). The house is worth around $202,000 and in pretty decent shape, no major repairs are needed. It's a pretty big house around 2,500 sq ft 3BD & 3BA in a good neighborhood. He said the house is about to go into foreclosure so it's like in pre-foreclosure status I believe. He filed for bankruptcy in February 2012 and the debt for the property has been discharged in the bankruptcy filing. He said the bank owns the property now. He said he is interested in selling the property but since I'm not familiar with this kind of situation, I'm not sure on where to start. He said I could talk with the bank and maybe negotiate a deal or something or wait until it goes into foreclosure. How would you turn this situation into a profit? What should I offer? Could I wholesale it, etc.?

Any help would be greatly appreciated! Thanks for reading!

[Chris Martin]

Matthew Terry From the information you provided, it sounds like this absentee owner (AO) still owns the property. As pointed out by Nick and Will, you need to verify who actually owns the property. You can do this through county records and most likely you can do this through an online records search.

The AO is telling you to talk to the bank because most likety this property is "under water"... meaning the note holder will need to approve a short sale for anything to realistically work. The owner probably isn't going to bring cash to closing. Knowing vital information (owner, debt balance, note status (performing or non-performing), legal status (lis pendens filed?), physical condition, potential value based on comps, etc.) is imperative when dealing with pre-foreclosures.

To answer the question what to do, at this stage it sounds like you are going only from what the owner told you. How do you know the place is worth $202,000? Is this after $X in fix up? Was/is the house in good shape? Is it listed for sale? Is a foreclosure sale scheduled? Have you looked at the foreclosure file to see the demand letter? Without details, it's hard to know if this is an opportunity worth pursuing.