Real Estate Investor · New Iberia, LA · Member since 2011 · 11 posts · 0 votes
Hi, I'm from Lousiana and I'm new to foreclosures. My partner and I been research and thought we had a few deals, but the sellers went cold on us. We have been reading but not been able to get the full understanding of how to wholesale pre-foreclosures, foreclosures, and bankruptcy properties. Is there anyone that can break this down for newbies just starting out. The way we understand it is find out the properties that are in pre-foreclosure call the owners and make an offer? Same as with bankruptcy property. Is this correct?
Regarding "...I'm new to foreclosures. My partner and I been research and thought we had a few deals, but the sellers went cold on us...." In a foreclosure the seller is the trustee or lien holder via sheriff, so if I understand this right, you were at the courthouse or other sale location with cash in hand (LA I believe requires 100% cash the day of the sale) and the seller (trustee or sheriff) "went cold"??? Perhaps you are really talking about a bank owned (post foreclosure) property, or REO.
Wholesaling bankruptcy properties will require intervention by the bankruptcy court. Basically the owner can't sell it until the court says so. I would say wholesaling property where the owner is in bankruptcy is a tough proposition. Likewise wholesaling foreclosure property will require you to have cash in hand, either yours or your end buyer's.
For pre-foreclosures, keep in mind the owner is in the process of losing their house. They are generally unapproachable. Your "find out the properties that are in pre-foreclosure call the owners and make an offer" approach, while technically correct, is very hard to execute. As a wholesaler, you also need to have a buyer for the property you are making an offer on.
I'd suggest reading as much as possible on this site to get a better understanding of what specific wholesaling niche to start with, and focus your energy on doing one deal in this specific area (e.g. pre-foreclosure, REO, absentee landlord, etc.)
Regarding "...I'm new to foreclosures. My partner and I been research and thought we had a few deals, but the sellers went cold on us...." In a foreclosure the seller is the trustee or lien holder via sheriff, so if I understand this right, you were at the courthouse or other sale location with cash in hand (LA I believe requires 100% cash the day of the sale) and the seller (trustee or sheriff) "went cold"??? Perhaps you are really talking about a bank owned (post foreclosure) property, or REO.
Wholesaling bankruptcy properties will require intervention by the bankruptcy court. Basically the owner can't sell it until the court says so. I would say wholesaling property where the owner is in bankruptcy is a tough proposition. Likewise wholesaling foreclosure property will require you to have cash in hand, either yours or your end buyer's.
For pre-foreclosures, keep in mind the owner is in the process of losing their house. They are generally unapproachable. Your "find out the properties that are in pre-foreclosure call the owners and make an offer" approach, while technically correct, is very hard to execute. As a wholesaler, you also need to have a buyer for the property you are making an offer on.
I'd suggest reading as much as possible on this site to get a better understanding of what specific wholesaling niche to start with, and focus your energy on doing one deal in this specific area (e.g. pre-foreclosure, REO, absentee landlord, etc.)
OK, thanks for your response. My next question and I'm sure there is no definate answer. For someone just starting out with Wholesaling is there a specific type that might be better to start with. I just read in the REO forum, and I'm totally confused. It seems a person would have to be more experienced to deal with REO's.
Have you considered getting a brokers license and selling real estate as an agent/broker? Maybe this would be a good way to get into the business. I assume you have an interest in real estate, based on the question you originally posted.
No I have not thought about that. I wouldn't know where to start. I would like to start with wholesaling but I'm not sure how to exactly start or what would be the best avenue.
We're been doing real estate and construction for over 25 years; and are just starting to get educated on foreclosures. There's a lot to them, and you want to know what you're doing before jumping in, and BP is a good place to start. Maybe you can find someone that knows the ropes and go in on a deal with them to learn?
It is great to see you are getting started, but that is a tough road to go. There is a lotta waiting involved. I like selling contracts on nice properties that are not in default. They are easy and quick to get, and quick and easy to sell.
I spent years selling contracts on junk and on foreclosures, but anymore, I like the low hanging fruit! LOL! :mrgreen:
Strategies like wholesaling is a "strategy".. nothing more nothing less.
If you're looking to base your business on just "strategies" then you're going to have a ruff ride....
If you're looking to wholesale as a business... then look at wholesaling as a business. Who does a wholesaler get a check?
Well lets go backwards...
You get the check
check is cut from title/escrow
deed has to record (depends on dry/wet closing - don't get hung up on this)
deal has to fund
you open escrow
EMD is put in
contract must be signed by both parties
You must have contact with a seller or seller rep.
Now... what's the last part? You gotta talk to seller or seller reps.
Marketing is the blood line of any business... focus on that... strategies on the "how to do the deal" is easy... trust me...
Finding the deal is the hard part.
Hope that helps.
Jeff Coga
www.TheVindication.com
Help Me Finish My Book