All Forum Posts by: John Slater

Quote from @Scott Mac:

Regarding wholesaling, 

( I know zero about wholesaling SFH's).

It seems like it would take a lot of time to find someone who does not want (a Realtor to set a value) and list a home properly?

How do you wholesalers set a price that's below market enough to make a profit (that's more than a Realtor & Broker would charge a deal for)?

Do you tell them you are valuation experts or something (but are misleading them to make a profit)?

Basically it seems like finding someone "ignorant of the process" enough to sell for a price cut to you (but secretly to someone else would be like finding a needle in a haystack.

Wouldn't just being a legal Realtor bring in more money with the same amount of time and effort--due to more available potential clients?

Just my 2 cents!

strong opinion for “no experience” in wholesaling haha

without a doubt I know there are wholesalers who take advantage, mislead, and get sellers under contract at a lower price than might make sense to you or I.  But then again, I know flippers and buy n hold investors who would do the same. Isn’t most of investors business about getting a discount??  does that mean ALL take advantage, of course not.

a wholesaler is calculating their numbers based on ARV, condition, cost of rehab etc. same as a flipper, but taking an assignment fee instead. It’s still the same, finding motivated sellers who “need” to sell at a discount for whatever reason. 

I’m an agent and have wholesaled. The numbers just made sense. The challenge I have with wholesalers is to the seller they are buying the house and if they can’t find a buyer, then what???

@Felicia S. For sure buying at auction has its pitfalls, but no, it's not rocket science and don't be scared off from it!!  Your process will be slighting different to mine, but here's an example of what I do here in Cali, its about working out your strategy for your state.

Find auction property.

Door-knock the owner, say hi, find out their intentions.  I want to see if any chance of doing a deal with the owner first, or if they are going to be a nitemare and eviction process etc.  At the same time I'm trying to get a look at the property.  Condition, can I see inside, but getting an idea for worst case scenario on rehab.

Get all my numbers together: Are you buying to hold? buying to flip? depends now on what your numbers look like. If you are re-selling, make a connection with a realtor, get them to give you ARV numbers and allow them to sell it for you on the back end. (I do my own)

If the numbers make sense, make friends with a title rep..  My guy will pull me full-pre-lim reports for free now because I use him for all my real estate.  

Pre-Lim report will show liens/judgements recorded against the property.  

If the first lender is foreclosing, most (not all) other liens can/will be wiped away at the auction sale. Property tax being an example of one that isn't.  But 2nd loans, junior liens are wiped away. (different states have some different rules on things like utility liens etc).

At the end of the day, if after all this my numbers make sense, I'm going to auction.  It's still a risk, especially if the owner/tenants don't want to move out, hence why I visit the property in the first place to see who's in there.

Oh, and if you haven't been to the auction before, go check out a couple... see if you see the same people there again and again and get familiar with the process.  

Quote from @Michael Furey:

Has anyone ever found a house they wanted to get that was set to go up for auction but tried to buy it before the date?  I want to buy this house and see if I can get it under contract before the auction date. Would that automatically stop the auction?

To answer you directly, NO, it won't automatically stop the sale but as some have pointed out there are ways to postpone a sale date, and simply sending a purchase contract with POF may work for one extension. However, there's a lot of missing info to know how best to proceed.

I didn't see you say if it had equity or was a short.  I see people commenting about short sales, discounted payoffs, which would be a nitemare if the property is already in auction, however, ignore short-sales, ignore discounted payoff IF the loan would be satisfied in full when you purchase it.

Hi, a lot of different items showing up on title there...  rule of thumb would be this.  

If the first loan/lien is foreclosure then all junior liens and junior judgements will be wiped out. You said "utility and mechanics liens will remain past foreclosure" but thats not usual... how did you get that info?

Property Taxes is the main exception.  

Have you had a title rep pull you a pre-lim report versus a quick title search?  the 'position' of liens/judgements is determined by the recording date of the liens/judgements.  

Quote from @Eliott Elias:

Foreclosures can only be bought cash. You can utilize financing with pre-foreclosures.

Terminology thing.. foreclosures as in ant auction agreed. But an REO, you can absolutely finance. 

Quote from @Mercedes Williams:

Looking into purchasing a foreclosure would I be able to do this with a 203k loan to cover any repairs that needs to be done. What should I look for when purchasing these types of homes.

Pre-foreclosures, as in still in the foreclosure process, yes you can purchase with traditional financing and a 203k loan. Everything comes down to numbers at the end of the day. If seller is willing to sell, it's just a regular transaction the same as any other, as long as there is time to close before the sale date. You can also purchase REO's, listed and being sold by the bank using same 203k loan, the only time a traditional loan won't work is if looking to buy at auction.

Quote from @Jay Hinrichs:

Quote from @John Slater:

There's several paid systems out... "finding" them is the easiest part of working pre-foreclosures..  

we find Property Radar to be the best service if its available in that market.

 Yep, best system for WC, not 1000% up to speed in some EC areas, for which I'd use prop stream is more on east.

There's several paid systems out... "finding" them is the easiest part of working pre-foreclosures..  

I keep seeing posts about "you should be careful" and "you can get in a lot of trouble" for working with homeowners in foreclosure.

I hear people say "some states have laws" to protect homeowners in foreclosure, and "Equity Skimming laws" etc etc.

My question has two parts... 

1. For all those mentioning these acts and laws, have you seen someone prosecuted recently?  and recently meaning not from 2008/2009 shambles.

2. Taking the NJ act for instance.. it says "HELP PROTECT DISTRESSED HOMEOWNERS FROM UNSCRUPULOUS FORECLOSURE CONSULTANTS" - But what if you aren't unscrupulous???

I had a random person tell me "If anyone I know was approached by someone taking advantage of their situation, I would feed them to the pigs".. 

My responses was.... would you rather someone like me help them to understand their situation, save their equity, avoid foreclosure.... or... let them lose everything because they listened to their family member who knows about pigs? why is it assumed everyone is there to take advantage......  

While I get these laws/acts are about protecting homeowners, if someone is legitimately offering help, education, FOR FREE... how do they fall into the "UNSCRUPULOUS" category? and at the end of the day, isn't it illegal in ALL states to commit fraud, regardless of what "distressed homeowner" laws are in place or not?

In December 2022 I met a family who asked me for help. I helped them connect with California mortgage relief, helped them to understand the application and they just received $42,000 of grant relief, paid directly to their lender for the default amount.  As of today, they are out of foreclosure and their next payment is due in 3 months (yes the grant paid all default plus 3 months to give breathing room).  They are out of foreclosure for now but can't really afford to keep their house, they have $300k in equity, they want to look in to their reverse options, whether that can work or not, but if nothing works they want me to help them sell their house... its not in bad condition so will be a listing, but if it was a dump, and I offered them a fair discounted price, am I open to being penalized under some foreclosure consultancy laws, even though I helped them get $42,000 of help.

Hi Asia, it is for sure a slight challenge wholesaling when you are trying to work with an agent - best to find off market leads/deals then you are working on listed properties.

Proof of funds - if you have one great, if you don't, there isn't really a legit way of showing one

Closing Attorney - This is because the agent is assuming you are "buying" the property and will close..

Seller paid closing costs - ??? I know what they are, but not sure what they are asking

Earnest Money - thats the deposit you'll make to show you are serious about buying..  

As an investor I've never worked with a realtor to acquire a property

As an agent, I don't let wholesalers try to wholesale a property I have the listing on.