All Forum Posts by: Tae Seung Kim

Hi, 

I'm trying to find a pre notice of default leads for pre foreclosure properties in fairfax county, virginia. 

Does anyone in virginia know if that is the right source or where to go to obtain the notice of default leads? 

I been searching for county records online and was wondering if this is the right link (source) to obtain such pre notice of defaults? 

http://www.fairfaxcounty.gov/courts/circuit/cpan.h...

http://www.fairfaxcounty.gov/courts/circuit/ccr-a-...

I was also looking into yellow papers and on that website, I found some interesting points...

http://yellowletterscomplete.com/leads

"Pre-Notice of Default leads are folks who are 30, 60 or 90 days past due on their mortgage. These are people who may need to sell their property or face foreclosure, and can be extremely motivated to sell or refinance. These leads come from credit data so you need to comply with the Fair Credit Reporting Act to market to these leads."

Does this mean that those pre-notice of defaults are most likely between lenders and the sellers (principal) and in order for the wholesaler to obtain the information is to get permission from the lender and its seller (principal)?  

I thought you bring the purchase and sale agreement to the title company and then after they do the title search on property to see if it's lien free, and then you find buyer & (get those 'agreement for sale') to the title company. Or it's better to take care of this in one setting?  

What if you do all this in one setting and the seller and buyer and the wholesaler are all excited to close on the property and the title company does title search and find out that the property has some liens on it. Wouldn't this piss off the buyer? 

First you have to find a motivated seller who will sell you their distressed properties. Make sure they have plenty of equity left (which can be hard to find) and they are extremely motivated. Once you meet and agree to come back (for best time) to their property and check for any problems within the house. This is when you get a general contractor who will walk with you to pinpoint any issues with the house and have the contractor give you quotes and repair estimates (preferable to have copy of this) and of course you want to pay him some fee. Before all this though, the seller has to be okay with you bringing contractor to the house to get those repair estimates. You then find out about the ARV (finding the ARV should be the first step), find repair costs, fixed costs, your wholesale fee and the possible end buyer's profit.

You want to present your offer to the seller and have him sign the dotted line in the contract (make sure they are state approved or reviewed by real estate attorney who deals with real estate investors/wholesalers). Get those and give it to your title company and have them do review on the property for any possible liens and encumbrances. If the title is clear and free of any encumbrances or if there is have it cleared up. If you think the seller and end buyer is going to go behind your back, then go to county records and file affidavit of memorandum of purchase and sale agreement and it would cloud the title (when seller and end buyer try to make a deal and close behind your back). Use this when you actually think there is a chance you would be left out of the deal though. 

And then find and market for buyers and you present to your buyer a good deal (one where the repair costs and other numbers are close to accurate and the profit deal for end buyer is sweet and the property criteria fits the end buyer's requirement). You then get the non-refundable fee and signed (contract of sale) from the end buyer and present that to your title company and connect the seller and the end buyer. You are officially out of the deal but make sure the deal between end buyer and seller closes well. The title company then mails you a check (from the difference on the HUD-1 paper) and you are free to spend that money. Wise thing though is to set up LLC and/or re-invest that money back into real estate investment (marketing, finding leads, paying fees, etc...) until you get the momentum and it becomes second hand nature to you.

The more you do it, the better. When you master at this, you can possibly move onto short sales (properties that are "underwatered", mortgage liens are more than what the property is worth) and then move onto REO. They aren't easy, but still possible.

Wow I did not know that. Thanks for telling me. When I was going through data on RPR, I thought I found all I needed. Seems like I need to find verification of data presented in that website. They say they get their info from public records and MLS. By the time, MLS and Public records update their info on certain properties, would RPR automatically have those data as well..?

for the mortgage info though, they only post the "original amount borrowed". I like that at least they post distressed properties on the map. 

On their video tutorial, they said their AVM and RVM are not exact representation of the comps itself so if we were to find comps, we have to do it ourselves and not just blindly rely on AVM, RVM. I think those AVM and RVM are like given estimate based from the data they obtained from MLS and public records.

The most important question is "are those info" up to date? When I asked them on this, they weren't sure. 

For investors, most important thing to know is (to find distressed properties -- which they already have and most importantly find out any liens the property has). For the properties, it doesn't reveal much about liens -- mortgage behind payments and other info. Those have to be obtained privately from distressed sellers. 

From reading all (most) of the posts here, I get the impression that wholesalers get bad rep because perhaps most wholesalers make a lot of mistakes with numbers and neglect to reveal necessity information to the end buyer. Which brings me to the next point. I think for wholesalers, educating and really learning about your market area is perhaps most important and know what each numbers represent and think from the end buyer's shoes. Maybe going through flipping property first might be better for wholesalers to understand the process better? 

Aside from possibly suffering from paralysis analysis, it's really important for wholesalers to learn to present the best deal first instead of focusing too much on the profit at the beginning. Once wholesaler gets educated with all the math process and nitty gritty stuff, then they can get enough experience to stretch out the profits for themselves and know how to play around with the number to give yourself enough profit and also make the end buyer happy to accept your deals. It will happen by 'case by case basis'. 

I think the gurus who have sold emotionally pumped up packages to the beginner wholesaler misled them to think that wholesaling is piece of cake, when it's not. It's not impossible but it does take time, effort, and consistency. 

With that in mind, being a real estate agent wouldn't hurt because you can get access to the comps yourself without having to rely on real estate agent or appraiser every time you needed certain comps and with your personal access to MLS system, you can learn at your own pace your general area market and focus on which area you want to wholesale and where most distressed properties tend to be at.

I'm aware that in MRIS system that I use, Virginia doesn't disclose distressed pre-foreclosure properties and trying to wholesale properties off of what is in MLS is hard because you got all possible realtors also competing for it and most of the properties in the MRIS area already listed by another agent. I would recommend wholesalers to focus on off-listed MLS properties and found your own county public records (make sure if it's online public records, they are not months behind and make sure they are not outdated).

I'm in a learning process right now and I had few offers declined but this is perhaps the whole process of learning. 

I don't think most wholesalers try deliberately scam end buyers; if they happen to make obvious mistakes (they could have avoided) maybe they needed more time to self-educate and ask questions, research and learn more before getting their feet wet. At some point though one has to jump in and tackle on and better to learn through action. I say avoid major mistakes by going online and learning from other wholesaler's mistakes and learn from minor mistakes. 

Does End buyer spread words around once they encounter incompetent wholesaler? I know wholesaling should be treated like a business so first impression and business conducts count and impact big time. Are some end buyers more merciful and aware that perhaps wholesalers are doing their best and will learn from their mistake and get better at it? I don't mean to throw off these questions to chide any end buyers but I just genuinely want to know. 

I'm curious to know... Are there any wholesaler out here who use the Fixed Cost Method instead of relying on the 65% or 70% rule? 

I'm late to this post but I just want to state couple of points here. 

I think as long as you put a good deal, finding buyers won't be that hard. If you promise to the seller that you and/or your end buyer will close to "x" number of days, then you should fulfill that promise (even if you are not going to see the seller again). That's just ethical and good business practice. Which means you should be prepared to either assign it and if not, then close it yourself but you better have good portions of back up money just in case you screw up with the math and get the rehab estimates really off. 

Now my big concern is this. Let's say the seller asks you to explain to them what is on the contract. Do you (as a wholesaler) have the power to explain what is in the contract to the seller? 

I had couple of people telling me that "constitutes as practicing law" and it could put the wholesaler into violation and breach of law. 

Would anyone (wholesaler) say to the seller, "get your own real estate attorney?" or tell them "I'm not an attorney so I cannot explain that in full details". Has any of these situations fell on anyone (wholesalers)? 

I'd say the hardest part about wholesaling are finding the right deal (homes with plenty of equity left) and finding really motivated seller. 

so where is this memorandum filed to? is it filed to the county register or filed and sent to the title company? Who needs to be present to sign the paperwork? Buyer? witness? and wholesaler? 

What happens during the process of closing pertaining to this document because this is considered "cloud". In order for closing to go smoothly, does the wholesaler have to remove this and where does the wholesaler need to go to remove this cloud?