All Forum Posts by: Keith Saunders

If it were me, I'd get it under contract and into escrow, making the sale contingent upon the total amount to due to lender (including all past due fees and attorney fees) being no greater than $32K. If the amount due is more than the sale price, you can cancel the contract, and the seller understands this upfront. If you've found a buyer that will pay a price that makes it worth doing the deal, you can renegotiate the contract with the seller.

I'm thinking your original question was about time. You should be able to sign it up, get into escrow and find a buyer in a week. That's plenty of time for everyone to perform before July 7. Of course, it has to be as you say it is about ARV and repairs. Are you sure of ARV? Have you checked title at all? Are there taxes due or other liens against the seller? If the condition is as bad as you say, there are probably code violations that might have already generated fees.

K. Marie

I beleive the ARV to be accurate according to comps sold in the past 3 months. I have NOT checked the title yet, figured I would do that if and when I find a buyer after signing the contract with the home owner and turn it in to my title company.

According to the county website, all taxes are paid trough 2012. Owner says there are no other leins but I know not to believe everything the home owner says. This will all come out when I run the title search right? Are you suggesting I do a title search before I sign either an option or contract?

I didn't think about the code violations that my have been incurred. Who would I need to contact to find out about any outstanding code violations? The Municipality or would that be City?

Keith

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Originally posted by Steve Hovencamp:

An Option to Purchase Agreement isn't a bad way to go. Personally I wouldn't put a property under contract without having a buyer in place who is open to buying a disaster before hand. I wholesale between 6 to 8 properties per month on average and I typically try to have it sold before I even tie it up. If you have any doubt in being able to sell it then just pass on it. Deals come and go.

Steve

As I am a newbie I don't have an extensive list of buyers yet. But I agree with you, best case is to have a buyer before you put it under contract. That was why I was thinking of using the Option agreement. I don't have any doubt I can sell it. My only doubt is do I have the time to find the buyer and close in the limited time frame.

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Originally posted by J Scott:

If your numbers are correct ($65K to rehab and $165K ARV), there's about $50K in profit in this deal between you and the end-buyer. If I bought in that area, I'd give you $50K for the property in a heart-beat (again, assuming your numbers are correct).

Given that I'm probably more conservative than most investors, that means you shouldn't have any problem finding a buyer VERY quickly, even with you making $10-15K in profit!

Stick it on Craigslist or find a more seasoned wholesaler who had a good buyer's list and split the deal with him -- you'll still make $5-10K for your efforts.

Thanks for the reply Scott.

I believe my numbers are right, but even if I'm 10K too low on repairs and 10K too high on my ARV, thats still 30k profit for the end buyer. When I do my numbers I am very conservative with the ARV and very liberal with the repairs. I might not make as much as some others would but I am trying to build a reputation of being honest and knowing not only the market but estimated repairs.

I think my numbers are spot on but we shall see, what others think.

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Originally posted by Steve Hovencamp:

Keith,
As for finding a buyer,you shouldn't have any problem finding buyer if the price right. Do you have a cash buyers list? If not, I highly suggest building one before you start putting properties under contract from now on. You don't need a massive list.You just need maybe 5 to 7 solid players who are buying multiple properties. You can find these guys at REIA meetings or auctions. Also you should put up 20 to 30 bandit signs(hand written) within a 1 or 2 mile radius of the property advertising a property and your phone will ring off the hook (use a google voice number).You should be posting ads on craigslist every 48 hrs as well.You could contact other wholesalers who have cash buyers and offer to split the profit if they bring a buyer to the table. All of this marketing for buyers needs to be done simultaneously!! As for trans funding,you shouldn't have a hard time finding someone local to provide it at less than 2,500 dollars. I have found local cash guys in my area who do it for 2 points flat. Or you could just assign the contract which is better. I hope some of this info helps.

Steve, thank for your reply.

I have a cash buyers list from the first property I wholesaled, which I sold in 10 days. But this current property is in REALLY bad shape, Severe water damage, wood rot, Hole in the roof you could drive a car through, possible mold, etc. The first house needed alot of work but it was solid. I have no doubt I can wholesale it this new one, the question is can I do it in the limited time I have available?

Bandit signs, are STRICKLY PROHIBITED in my area so I can't use them. Already have a google voice number I have been using for all my real estate stuff. Craigslist is how I sold the first one, with the assistance of postlets, to make it look professional. Along with backpage and Custom made yard sign, with the QR code in the window of the house. I brought it to the monthly meeting of my REIA too to promote it. So, I got the advertising taken care of for any property I find.

My problem isn't not knowing how to market the house, I got that covered. It's not wanting to put myself in a situation I don't want to be in. In this case being forced to buy this house myself if I can't find an end buyer in this limited period of time. And unless you or anyone else has any different ideas I think an Oprion to Purchase Agreement is my best play here.

Anyone think any different?

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Originally posted by Timothy Rogers:

@Keith Saunders Are the legal fees included in the payoff amount of $31,844? If not then the seller sold himself short. He will still owe the bank. I know banks will add on legal fees when they have begun the foreclosure process.

Banks will not work with you or wait on you, so have that buyer in place before you take contract to title company.

I don't know for sure, if all legal fees are included in the $31844 due. I will find out more on monday when I meet the home owner.

I'm starting to think I should do an Option to purchase agreement, try to find a buyer then sign the contract with the home owner. I don't know if the homeowner will go for it or if I do find a buyer if I will still have time to close before the bank takes it back.

As for the banks not working with you. With the glut of foreclosures in todays market. If they can get one off their books for what is owed, without having to spend the money to foreclose, hold, then sell it, why wouldn't they work with a buyer?

Doesn't seem like a smart financial move if you ask me. But who says the banks are smart when it comes to finances?

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TIM: He owes $31844, He accepted an offer for $32000.

BILL: I don't know how many payments he owes but he says he owes $31844. Which I will of course verify. No, I didn't get an option, what do you suggest?

STEVE: Yeh I found that out about the double transfer tax the hard way when I completed my first assignment deal. My title company never told me about it until the day of the closing. I ended up eating $3k in transfer taxes. Needless to say I found another title company for this and future deals.

As for the double close, I don't think I will actually get $55K for the property, more likely $42 to 45K. So I have no plans to engage transactional lenders as they charge a minimum of $2500 plus points.

I had planned to talk to the bank, but don't I need to get the home owner to sign a financial information release letter then fax it to the bank, before the bank will even talk to me?

I remember I used that letter about 5 years ago when I tried to buy my first short sale property.

His bank is citimortgage. You have any dealings with them? I've heard banks like Wells Fargo are a pain to deal with.

I'm assuming I need to talk to the bank first before I sign the contract with the home owner, not only to verify the amount owed to make sure they will give me the extra time I need. Now obviously I don;t want to let the bank know I'm doing a wholesale, right?

Thanks to all for your responses,

Keith

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I'm a newbie wholesaler here in pittsburgh. I got 1 deal under my belt so far and looking for the next one. I found a guy ready to sell his house. Half the house is in OK shape the other half is a disaster, Severe water damage,rotted out floors, and you can see outside looking through the roof. I beleive the ARV to be $165K. Offered owner $32K which he accepted. Think it will take $65k to repair and $3k to close. The problem is the time line. He tells me today the bank will take the house back on July 7, 2012. I'm not sure I can find a buyer and close in that time. My usual game plan is to sign the contract for 60 to 90 days giving me time to find a buyer. I plan on marketing the house for $55K but will take anything above $42k.

What is my best option?

Wait for the bank to take it then do a short sale?

Sign the contract, then contact the bank to try to get an extension for 60 - 90 days?

Try to sell it for less profit maybe say $37K and market it for $42k?

or is there something else I can do here?

I don't have the money to buy the house if I can't find an end buyer to assign the contract to. So I have to find a buyer to make this deal viable. As time is short I would appreciate you response ASAP.

Thanks,

Keith Saunders

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Originally posted by Erick Gause:

Targeting preforclosures is a lot harder now then say 2004-2008 as most homeowners have given up and left. They see they owe twice as much as the property is worth and they feel there is nothing they can do because the bank won’t listen. Understanding this may help you understand why you’re not getting any calls. Some of these “vacant homes” are actually already owned by the back and a field service company has it locked up. Depending on the bank some of these houses have been in this status for months and even years before the bank decides to sell it through an REO broker or auction company.

What is your end game in targeting foreclosures. Are you offering help?, Short Sale? Selling the house? Buying notes? Are you flipping, wholesaling? etc I ask as there are other properties you can target to make money. Currently, I personally prefer targeting vacant homes which are not in foreclosure. There are other reasons, such as tenant problems/evictions, probates/trust, divorce, job transfers etc. These, in my opinion, are easier to get calls back and/or deals.

When I see a vacant property with no for sale sign, I check to see if it has a lock box on the door or any field service stickers. If it does, I check property records to see if the bank owns it yet, if the bank does then I will call certain REO brokers I know who get listings from that bank and let them know about the property. The broker will then expedite the property to get released for sale and the broker will give me first crack before the he list it on the MLS. He does this as I do not use a realtor and he can keep the whole commission.

Tip for driving for dollars: When you see a property – “Get out of the car and investigate”, look for note, letters signs, stickers by front door which can help give you owners names and why house is vacant, also the neighbors will be out and talking to them will give you even more background on the property.

Whatever you do, make sure you keep doing it and keep going forward each week until you get the deal done, don't give up!
Big E

Erick, at this time I am strickly wholesaling. The properties I'm identifying are NOT preforclosures, or foreclosures. They are vacant homes owned outright by the listed homeowner, that have all taxes paid, and are completely paid off with no liens.

I do get out of the car and inspect the property each time I see a house I think is vacant. I do talk to the neighbors to get as much info as possible. I inspect tax, deed and mortgage records for each property. I run a skip trace on the listed homeowners and their immediate family, sending letters to each of them to increase my chances of success in reaching the homeowners. Before I even send the home owner the first letter I know as much about the property as I can as well as the status of the homeowner IE: divorced, deceased, out of town owner, what other properties they own and where, how long the property has been vacant, current address and phone number, ARV, home specs, property specs, tax staus, etc.

These are not MLS, REO or FSBO homes. They are just vacant homes fully paid off that have been abandoned for some reason. In most cases nice homes in good middle and upper middle class neighborhoods.

I know the properties, my market, and as much as I can about the situation of each homeowner as I can. Just can't seem to get any of them to contact me for some reason.

What method do you use to contact absentee homeowners? And how effective is it?

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Originally posted by Jon Holdman:

Two hundred letters is nothing. If you send 2,000 with no good responses, then you should try something different.

You'll have to keep banging on them. One letter does little. Six letters over six months will produce more results.

How many angry calls have you had? 100? 10? 5? Just take them off your list and keep mailing to the rest.

Jon, I do understand what your saying is true, I am 2 and in some cases 3 letters in on some of the properties I have identified.

I do have some questions though.

Do you send the same letter each time? Using the same pink envelope?
If you have the homeowners phone number do you ever just call them and ask if they want to sell?
What type of contact method works best for you?
Do you use a service to skip trace absentee home owners?
If so, who do you use and how much per skip trace?

Any help is appreciated.

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Originally posted by Michael Quarles:

good morning Keith

I have a friend I work out with. He pisses me off every time it chest day. He always makes me go first, so I lay down on the bench place my hands in the most appropriate spot to push the most weight I can and I can barely push 285.

He lays down and pushes 495 with ease. Just pisses me off. As I begin to complain about my lack of ability compared to his he wisely tells me to shut up. And continues with little facts like he owns the gym, that he is a gym rat, that he was a professional athlete, and finally says I remember when you referring to me had a hard time pushing 135.

So I guess marketing is a lot like exercise.

Michael, afternoon my friend. Although I appreciate a good analogy as much as the next guy it really doesn't address my issue.

Obviously my professional letter isn't working for me. So what does work? A hand written note send in an invitation envelope written on yellow line paper with red ink? Or cold calling the home owner if you can find their phone number? or maybe post cards?

I understand its a numbers game but as I said I am trying to market to those properties I KNOW are vacant and have been for some time. I'm NOT mass marketing as I don't have the money for that kind of campain right now.

What I'm looking for is what is the most effective way to contact specific absentee home owners of homes i know are vacant.

Any ideas?

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All Forum Posts by: Keith Saunders

Keith Saunders has started 10 posts and replied 60 times.

Post: Great wholesale deal but little time, What do I do?

Post: Great wholesale deal but little time, What do I do?

Post: Great wholesale deal but little time, What do I do?

Post: Great wholesale deal but little time, What do I do?

Post: Great wholesale deal but little time, What do I do?

Post: Great wholesale deal but little time, What do I do?

Post: Great wholesale deal but little time, What do I do?

Post: How do you contact absentee home owners?

Post: How do you contact absentee home owners?

Post: How do you contact absentee home owners?