HELP! Newbie! First lead is getting complicated!

[Kim Handelman]

Hey all,

After two mailings I have my first live lead and am going to see the condo tomorrow. Been doing some investigation because the owner is being tight lipped and is pretty emotional. Found out that her mother needed to go to an elderly facility sometime last winter. In March of 2014 a pipe burst and she got permits and an estimate for repairs of $23,000. Fast forward to Dec 2014 the Condo Association has filed a Notice of Lis Pendens to foreclose on her for not paying her HOA fees. I'm trying to get an idea of how much she owes on the place so I know what her bottom line will be. My mailing went out to people with 60% to 100% equity.

My first question is how does ListServe calculate equity? Is it based on the amount of the original loan which is $400K or market value which changes frequently? Anyone know how I can find out how much she owes? 

My second question is, if the association is trying to foreclose on her for non-payment, is it possible to go to them and negotiate a payoff? They've got to be motivated to make this problem go away right? Any advice on strategy for tomorrows meeting would be helpful. FYI, I am taking a contractor with me to estimate the cost of the rehab. THANKS IN ADVANCE!

[Steven J.]

Meet with the association and mention that you're talking with the seller trying to help their situation. They don't want to go through the troubles of foreclosure - that costs them and puts someone out of their house. 

It sounds like you'd like to figure out a way to help the seller and they are in trouble. At this point it may be that she needs to manage her damage control. I'm in the process of a similar situation right now with a home. I had to mention a couple times the implications of losing the home would be to the owners credit score. 

As for meeting with the seller make sure to attend to her emotional side. I always feel so uncomfortable when I bring a contractor in to make repair estimates with the seller there when we're just starting conversation. Let the contractor make his lists and be the calculating matter of fact personality in the room while you are the person on her side. You want to help her out, her home is something that would fit your business model, its a quality home and is in decent shape despite the situation with the burst pipe, and although its estimated of 23k in repairs the potential is definitely there. An investor friend told me that you shouldn't talk to a seller giving them a list of everything that is wrong. Every other investor does that, they already know what is wrong, and at this level of motivation they don't care - they need out.

As for list source - I don't put much weight on those list providing sites. Some are good some are not. In my overall farm area, there is only one town that reports number of bedrooms. So when I payed for my first list of SFH 3/2 between 30k and 300k I ended up with homes only in one section. If your city/county/jurisdiction doesn't report the information list source won't know.