All Forum Posts by: Paul Hitchings

You basically start making payments on their mortgage. There are clauses to watch out for like the "due on sale" clause. Ideally, have an attorney review the paperwork and contact the bank to confirm they are okay with this before proceeding.

Working with a title company (or other online service) you can find addresses of buyers who are late on their mortgage. But can you draft an effective marketing campaign to get them to contact you? That is the million dollar question.

I prefer door knocking, but time is money and gas is expensive!

Save money. Get a full-time job. Get qualified for a loan. Buy a duplex. To accelerate the process go to school at night while working full-time and consider investing with a partner and/or ask family for help with your first home purchase and let them record a deed against the property for the amount they loan you, so when you refinance, they will have legal documents protecting their investment. FHA loan is about 3.5% down. If you are active military, you can qualify for VA loans too.

 In the meantime, don't worry about not being able to buy a home now. Keep your finances tight, save like a squirrel preparing for winter, and just keep learning.

You are 100% on the right track to financial independence. Keep it up!

I would say it is not normal to a bank to say "We'll consider a short-sale" in writing. Take it as an omen from God! Kidding aside, go with the flow.

Do your numbers and figure out what you want to pay for it, then anchor your bid some amount below that, maybe 80% - 90%. Too low an opening bid and you don't look professional. Too high and you have no room to negotiate. If you can include inspections and/or contractor quotes to confirm why your offer is what it is, more power to you. There is no rule about getting quotes and inspections before you are in contract, with owner permission, of course.

If you really want your offer to have power, put the funds into escrow and give the bank the number to contact. Tell the bank in the cover letter for the offer "I have X in an escrow account with X company. I can close in 7 days." Notice you are not making an offer "subject to inspections" because you already did that and you want to so save the bank time(money).  After the bank confirms your funds are in escrow, they will know not only do you have the cash but that you are a power player who doesn't waste time in making things happen.

To up your game a notch, deliver the offer in person to the manager of the bank and shake his/her hand, look them right in the eye and use Jedi mind tricks to convince them you are the real deal. 

Good luck and report back!

Why are you looking at foreclosures in particular and where/how do you plan to buy them? What do you want to do with them? Flip? Hold? BRRRR? Multi-families will tend to cash flow better than SFRs and living in a home and doing a "house hack" can be helpful too, for a variety of reasons. And the house hack doesn't have to be forever, you could live in a duplex for 2 years and then put a tenant in it and move on to the next project.

Do either of you have construction skills or are you interested in learning them?

Realtor.com has the most accurate MLS feed. Other sites are typically less accurate.

My advice is use whatever site you like the best, but confirm by looking the listing on Realtor.com and then by calling the agent. 

No reason, imho, to avoid a website like Zillow or Trulia just because they don't have the most up to date listings, just keep that in mind in your search. As a matter of fact, Zillow was showing a property sold recently and that was more accurate than Realtor.com, which just said "off market", so I'm sure in some cases Trulia or Zillow might win.

I'm curious to hear what others have to say.

 Dare I say, he might want to start working with a Realtor? :)

I say excluding student loans because if you have, say, a $20K balance, it could be more beneficial to buy a home now rather than waiting 3 years and paying off the loan first. 

The biggest factor would be rent vs. mortgage. With rent, the money never comes back, with a mortgage, eventually you will be putting a dent in the principle (though not for the first few years of mostly interest payments). Tax benefits of interest payments may also factor into this decision, along with all the other costs of home ownership, PMI, maintenance, etc.

FWIW - anyone flying from Burbank to Sacramento can find $79 Southwest fares leaving on 5/1 and returning 5/3. $180 for an amazing networking event is truly a great investment. I've found, after attending several events in the Bay Area over the past few years, that one presentation or one conversation can truly open both doors and minds.  I know I'm hooked on real estate for life, mostly as a result of you darned investors!

How are you going to pay the mortgage on the investment property? Rent? You buying a SFR or multi?

Home comps at $157K - $168K?