Negotiating with Distressed Property Owner

[Hal Thompson]

Hi Backpagers-

I am currently in the process of trying to buy a distressed SFR from the wife of the deceased owner. The property is in pretty bad shape, and will need a lot of work. There is a first mortgage for approximately $240k, and a second for approximately $150k.

Whether the house is a good deal or not will depend largely on its structural integrity. Because it has been abandoned for a long time, it is possible it must be torn down.

I have been in these types of workout situations before, but my success rate has been low. My "bedside manner" needs some work I think. I also could use some advice on how others have approached talking to distressed homeowners about workouts. For example:

1) Do you offer some cash upfront, regardless of whether the workout succeeds or not, in order to get the property under contract and do an inspection?

2) Do you have a script or specific approach to explaining the workout to the homeowner?

3) Are there things I should say, or avoid saying, to the homeowner?

4) What is the best approach to getting the property under contract so I can inspect it without fear or someone taking the deal from me (but also giving me outs in case I want to bail)?

5) Do you have any specific releases that allow you to discuss the outstanding loans with the bank(s) that are known to work? (most banks require authorization to discuss loans).

6) Any other thoughts that you have found helpful in this situation.

I have an introduction to the homeowner, which is often the hardest part, but I want to pre-plan next steps.

Thanks for your help!

Hal