All Forum Posts by: Chris Swindle

Also, I realize I probably shouldn't say foreclosure. The properties I would like to buy are not actually bank owned yet. I would like to try and buy properties before the bank takes back ownership. I realize this is done at the courthouse and I have been a few times but found the whole process overwhelming/a waste of time. The first couple of times I went in regards to auction.com properties. The properties I was interested in either didn't sell (i.e. were pulled at the last minute), or that the price where opening bid was set was so high that you would be buying the property w/ minimal equity. 

However, while at the courthouse I realized that there is a whole other set of potential deals to bid on. I was hoping someone could help me understand this process!

Hey all, 

I was hoping all of you smart investors could help walk me through the foreclosure process. I don't mean buying a property that is REO owned, I mean actually trying to buy properties before the bank gets them. In my experience, I have been seeing some pricing discrepancies recently in some neighborhoods I look at. Basically, a home will have gone through the foreclosure process, the bank will take it back at say $70K and then put it on MLS for $75-80K, which will then sell quickly. So some deals are there to be had. Could anyone help explain the process of 'bidding on the courthouse steps'?

Hey all, 

I would appreciate some feedback on a letter that I am writing for a seller. 

The basic gist of what happened is that a seller entered into a contract with another investor on April 22, 2016. The original closing date was scheduled for July 1st, 2016. By July 1,  the investor did not close but shortly later did get the seller to sign an addendum that changed the settlement date to Oct. 31, 2016. 

I figured out was going on and reached out to the Seller in Sept. I told him that I would be interested in buying the property if the investor did not close the 2nd time around. The week of Oct. 31st, the other investor had not spoken with the seller but finally leaves a voice mail saying something about the closing. They can never get in contact with each other (play phone tag) and Oct. 31st comes and passes. Finally, on Nov. 3rd or 4th, the seller gets into contact with buyer and since the new settlement date has passed says that he would like to get out of the contract. The investor says there is a 2-week grace period built into the contract and threatens to sue if seller does not sell him the property.

Pretty much where we stand now is that after being intimidated by the threat of the lawsuit, the investor now has scheduled a Jan. 20th closing date. I told seller that he has every right to get out of the contract and that the other party is in breach and wrote a termination letter for him. I would love to get some feedback from other investors about this situation and the letter in general. Thanks for the help in advance. Below is the letter.

__________________________________________________________________________________________

Dear Investor,

This letter is in regards to the offer to purchase and contract that we entered into with you on April 22, 2016. The purpose of this letter is to serve as a notice of termination for the aforementioned contract (dated April 22, 2016, and which had an original settlement date of July 1, 2016). The reason that we have decided to terminate the contract is because of your failure to close by the agreed upon settlement date of October 31, 2016, which had previously been mutually extended from July 1, 2016 to October 31, 2016.

As the agreed upon settlement date of October 31, 2016 has passed, you have tried to push the closing back again. However, according to the contract, your failure to close this second time around makes you the “Delaying Party” and puts you in breach of the contract. As stated in the contract, “if the parties fail to complete Settlement and Closing within fourteen (14) days of the Settlement Date or to otherwise extend the Settlement Date by written agreement, then the Delaying Party shall be in breach and the Non-Delaying Party may terminate [the] Contract and shall be entitled to enforce any remedies available to such party under this Contract for the breach.” Due to your repeated failure to close by the agreed upon settlement date and your repeated attempts to prolong the settlement date, we have decided to exercise, effective immediately, the right granted to us under the contract of terminating the aforementioned agreement. Thank you for understanding. 

Dang man, that really sucks, i don't have any advice and have never dealt with this but just wanted to wish you luck

Hi @JerryPuckett,

Thanks for the reply. I agree with the advice in the thread. I will be reaching out to my buyer list again and let them know that I have lowered the price (tough call to make!). I will also try some other avenues (craigslist, for example). 

Also, I really appreciate your thoughts; you have some great ideas. Unfortunately, I do not have access to MLS, so I am limited somewhat by that. Nonetheless, I will still try and find cash buyers using a few other means I have in mind. Finally, the idea of renegotiating is true. While not pleasant, it would be an option and if these methods do not work. I will give it a couple weeks and if I still get no response I will go back and renegotiate.

 I would be interested in something like that and would be willing to make less to close the deal.

Hey Kevin,

Agree. I believe I overestimated value from wholesale side. $65K may be retail value but not for wholesale. One way or the other, I definitely need to lower the price. Also, how do you do the @ command? I'm still new around here.

Hi All,

I've done a number of wholesale deals in the past. Right now, I am working on one in which, I think I may have overestimated the value. Other deals I have done, investors usually jump at them quickly. However, I am working on one now, where I think I marked up the property too much. The essentially the deal is as follows: a lot which I have under contract for $45,000. I reached out to my buyer list in the area of 20+ investors that have closed deals nearby recently and have gotten lukewarm response while offering the contract for $65,000 (1st mistake). It has been over a week now since reaching out to these investors and so far I have not gotten much response. Obviously, the first step is to lower the price, but my next question is, if my list of investors are not interested, what other options would you guys advise? Has anyone had experience like this in the past? Thanks!

Just to give an idea, the last rehabbed new construction properties that sold in the area are as follows

Nov. 14th, = 1,302 sqft. $300K

Sept. 16th, = 1,194 sqft. $298K 

Aug. 31st, = 1,270 sqft. $290K

Aug. 24th, = 1,136 sqft. $262K

Aug. 12th = 1,400 sqft. $296K

All these properties are walkable (5 blocks at most) from where my lot is. That's a $229/sqft. avg. so my price of $220 is quite conservative, especially since only one property sold for less than $220/ sqft. and that sale was the least recent. 

Hey Steve,

They had given me a due diligence check when we first came into agreement ($500). I decided not to cash it because of the title issues that came up, and since it would have not been their fault if seller couldn't sell because of those. Those have since been fixed but they have never given me anything else. We were supposed to sign a new assignment agreement last week (Wed.). I signed it and dropped it off for them but they have not gotten it back to me.