All Forum Posts by: Walter Holmes

Most info is public records,  there's not much info about a loan that someone with the "know how" can't figure out just with an address or name . 

if you are wanting to invest in distressed properties you need to learn these things (not rocket science) with all due respect to Realtors  but very few really know distressed properties investment they usually will look for someone like me to do the due diligence for their investors but then again it pays to know the right people. 

For new investors wanting to start my advice is always the same...learn the basics of due diligence so you can prospect your potential investment,  then pay an expert ...i have a few post on this and due diligence. 

1. Look for the judgment either in the court docket , i believe the auction site also has it. Keep in kind lender are also given a % interest they can claim after said judgment.  Look for taxes owed and hoa (those will survive the fcl (open permits and unpaid violations)

2. Is a bit more complex to answer depending on your findings on 1.

If the property is underwater you have a short-sale to be approved by the sr loan. If there's equity getting the borrower on board is enough.  (Just an over simplification ofcourse)

my advise ? Always do 1. Before even talking to the borrower,  your finding there will tell you if you have something there or how to approach the deal.

The answer to your question is 100% NO. .. 

The Borrower is the legal owner of the property until the foreclosure process is complete. 

Him and ONLY him can make the desition to LIST the property , on an underwater  property it is up to the lender to approve the short-sale. so you need both to successfully acquire the property.

If there's enough equity to payoff all liens then the borrower is all you need.

I've notice a few things:

Appraisals or bpo  are coming back WAY lower . When i started doing them my self i notice that obviously when the latest comps used are post pandemic prices dropped add that many people are waiting for the pandemic and moratorium to finish before buying.

For condos and apartments investors are afraid to deal with current tenants not paying and the Eviction process.

I think this is a GREAT time to pull the trigger since this has an expiration date, record low mortgage interest and buyers waiting in the sidelines... it is a perfect storm for property prices to skyrocket.

 Sorry not sure what you meant.

Maybe i can help by giving the lender's perspective and some quick things you can look for to discard or get a good a short-sale prospect.

If you want to be taken serious and get quick responses from lenders my advise is to present a pre-hud with a sale price so that they can see the estimate net proceeds they will be paid.

Take a few hours put the numbers together by looking for liens , hoa, taxes and any other debt needed to be paid at closing. 

In your example if that property has a second mortgage or other liens that will eat up the lender's net proceeds susbstancially? move on ! 

A foreclosure costs 5-10k the lender can wipe most liens and pay less in HOA fees by proceeding with the foreclosure (taxes and municipal liens survive the foreclosure in most states).

Holding hope that you can negotiate with other lien holders is a waste of time 9 out of 10 times, you are better off discarding those prospects and move on to the next.

Prime candidates for short-sales are properties with no or little additional  debt aside from the note holder ofcourse...So start there!

This will give you a regitimate case to present the lender and the borrower that a short-sale is in everyone's best interest.

Back to your case! If the property is worth 240k present a sales price of $200k (15%-20% off of market value)

Hud would look something like:

200k- Sales price

6%realtor commissions 12k -- closing cost and taxes - lets call it 15k (very rough numbers)

200k-12k-15k=173k .

Now, you have the lender's attention by providing them a posible exit to the defaulted loan.

The 15%-20% under market value you are offering will be reasonable to the lender as they will weight in the legal fees and cost for foreclosure and cost of the time they will hold the property as an REO. on maintenance, manpower and lost profits on interest the $ should be generating.(Look at the note interest rate )

Once you are communicating with the lender and your offer is taken serious get pictures and estimates for the repairs in question send them over to the lender and negotiate the credit.

worst case scenario for most lenders is having to fix repairs and hold properties for even longer.

Please Understand, that my 2 cents come from my background in default management. 

Lender's procedures and their approach vary substantially. I do not have much experience in wholesales 

Hope this helps!

Best of luck.

I would look for open/close permits in the county, this helps me have an idea of previous work and conditions of the property like the last time the roof was done and any other misc, ofcourse this accounts for work where permits were opened but at least gives you a good starting point .

I go by mls or latest listing for a more accurate property details.

Property appraiser has floor plans for many properties so that it can give you a better idea.

best of luck!

 We are launching our auction duediligence site in case you ever need it. We are offering 30 days free for all BP users.

Dan California is a non-judicial state, unfortunately the filings are different than judicial states which have a complaint.  As i mentioned before my experience is with judicial states. 

whish i could be of more help.

Fast people finder is not bad