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What did they say when you told them the "real" status on the property? That will go a long way in answering the question.

Unfortunately, BS and attorneys just seem to go together. Here in Indiana, there is an attorney contacting trusts, ostensibly on the part of the Sub2 seller deals (and obviously ignoring the filed Assignment of Beneficial Interest- a document that clearly states the company is 100% beneficial interest of the Trust). He then records a new deed, effectively deeding the property back to the Sub2 sellers. The language included on this new deed stated in part, "We the beneficiaries now appoint ourselves Trustee and grant to us this property..." Then he chose, as a defense, that the 'complexity' of this transaction was to baffle the sellers... THEN the attorney contacts the tenants and directed them to pay him the rent.

He also sent the tenants a letter that stated the Sub2 buyers actual purchase price of the property.

See, BS and lawyers just seem to go together.

Hate to burst your bubble, but "No."

They gather information from the same place you would. Charge, IMHO, far too much for it and it's usually 3-4 weeks behind, while precious time has frittered away.

Going to the courthouse or reading the local legal newspaper at the library (which is basically all these various companies do) is still the best way to get info. Better is door hangers and good ol' door knocking, in the long run.

FWIW
Bob

Just a heads up as to what we're seeing in Indiana ("Foreclosure Capital of the World" ) that I'd thought I'd share.

In the past, when dealing with a Sub2, we could usually get by writing a letter to the bank (when the HO was getting another/new mortgage) stating there was an agreement/lease/etc. and they would look at that as 90-95% "to the good" in the HO's favor--an asset if you will.

With the sub-prime mess going on, we're starting to see a couple of negative trends.

First, the bank wants to see ALL the paperwork on the deal (and it is taking FOREVER to get it looked at-there is a general slowing down, period, in the time its taking for deals to be approved--underwriting is WAY backed up). Don't even try to back date it.

Second, and this is new, IF they count our deal at all (and that's getting "iffy" if there is even a hint of the HO not having the income), the banks now are only valuing it at 65-70%! As an example, if the PITI was $1000/mo. the bank would take $9-950. Now it's more like $650. So, in effect, the HO "loses" $4,200 in income to purchase ratio.

Just something to be aware of when/if the HO asks.

FWIW

Which has me wondering about the most effective marketing for this approach.

Michael nailed it on the mechanics of dealing with the buyer. In answer to your base question, start dialing your buyer's list. You have one, right?

FWIW
Bob

It will always be the one you didn't buy, but the one someone else did. . Conversely, it will never be the one you bought, but the one that just came out. And, you will always have to modify whichever one you choose to a) be in your 'voice', b) meet your market's needs and c) the one you can afford.

(As a side note, I wouldn't recommend starting a REI career with SS. They can take forever and be discouraging, if you haven't a clue about what information the banks really want. They can slow the process down like you wouldn't believe if they think they are dealing with a rookie/novice.)

Having made that caveat, there are as many answers as 'Carter has pills.' Do you want one that is all detail or all techniques? One that is scripted or one that has example of the letters you'll need to write? How about the one dealing with the emotional trauma the HO is going through or one dealing with the 'let's get this done' mindset? Or, the one that sounds just this side of shady or the one that has their contracts gone over and over by a bank of lawyers?

At the end of the day, they all deal with the same subject matter--getting the bank to take less than they are owed. Now some may have a few twists because of today's market, but the 1-2-3's of the deal are going to be basically the same.

Like I tell my children, pick one and go with it!! Whichever one you pick will be wrong-LOL

FWIW
Bob

SB is correct. When a person dies intestate (without a will), the state becomes the executor. Then the bureaucratic nightmare begins!

Have you checked the courthouse records to see if a will is/was recorded? Usually its at the County Clerk and, unbelievably is public. You kinda make it sound like it was fairly recent (you mentioned her obit) so it may just be starting in probate (assuming there was a will) which is another place to check (probate court clerk).

If its boarded up, and especially if its condemned as you mention, it should be "plastered" with notices that should have some contact info.

You may also be able to go to the city department that handles condemnations (or zoning) and they may have info on the owner or at least its status (say, if it was condemned).

"Is it a deal?" really is the question. It sounds like you're going to put on your "Columbo" gear and spend some time, so make sure you have an exit strategy for it. Keep us posted.

FWIW
Bob

There are a few other things you need to be aware of also.

1. You also need to make it clear to the owners they need to leave ASAP if you're going to work with them.
2. You need to contact the bank to see exactly where it is in the "process" i.e. is the Sheriffs sale scheduled (shouldn't be already, but in today's market who knows!). NOTE: You do not have to share with the bank what your doing--that pesky DOS clause--but you can share you're helping a friend out if they ask. DO NOT pretend you are the HO.
3. While speaking with the bank, you need to also find out how much you'll need to bring it current. That figure MAY put the kibosh on the deal, because more than likely it will be more than a couple of payments and probably will include legal fees, recording fees, etc, etc. What ever that amount is will have to be in "good funds" e.g. a cashier or certified check (cash out of your pocket).
4. You have to be very, very careful about telling them your "repairing their credit." That phrase alone is starting to put people in jail or at the very least heavily fined. You're helping them out of a jam, but.....
5. Then once you have done these items, you can either wholesale it, L/O, etc.
6. IF you take the deed, make sure the bank is notified where and to whom the payment coupons are to be sent to.

FWIW
Bob

That's weird (re: having to sign in every time). I use Firefox, if that makes a difference? I have this forum ("Recent Posts" page) set as one of my multiple home pages-another feature in FF. When I start up my browser, it goes to that page as well as my other 2. The only time I have to reenter my UN/PW is when I do a thorough cache clean, but its a remembered UN/PW so it repopulates the fields automatically. Strange.

Regarding the other, for what ever reason, we're starting to live in a "Kumbaya" world, aren't we? And, you're right. While people may tend to be more direct in a blog than in person, it isn't a lot more direct, and its infinitely better to be armed with what probably will be said and/or happen BEFORE it does. Its like the old saw, "Expect the WORST, Hope for the BEST and anywhere in between is gravy."

I have in the recent past spoken with ZNICK directly (remember him?) and even he couldn't get any responses from Steve Duce or any of the people at RL/Global. I hope you don't "Not Fade Away." LOL I enjoy your posts.

It DOES get annoying (at least to me) when I post then get an error message. I did learn when you get that to close the browser and reopen it. That eliminates the double & triple posting.

FWIW
Bob
Edited by 516properties on Apr 25, 2007 at 09:01 AM

Yeah, I wondered about that also. But, I still come here and try to answer as best/honestly as I can if someone has an issue. It may not be "RL way" but it's what has or is working for me. Besides, I'm not a fan of "moderators." LOL

Aren't you getting your check as a moderator? Mine clears!

FWIW
Bob

Ah-sodeska. If what you say is what they mean (always leery of that-not you, it's me), then I'd say it's similar. The descriptions sound the same. Each and every guru out there wants to put their own spin on things, I suppose. I believe I'll call mine "Freds" LOL.

The only caveat I would place on it (and again, it sounds like they are suggesting that) is make sure you have a lease to go with it, cause if they (the T/B) have any inkling they have any equitable claim on the title then you have to go through Foreclosure rather than eviction. That's why here in Indiana, we always advise others to not sell a property via a land contract-it gives them an equitable claim.

FWIW
Bob

After I posted this, I got a new mailing from RL/Global. It seems RL is completely changing the Pretty House side of things fairly substantially like doing away with L/O's focusing, as it says, on getting ownership rather than relying on sellers who try to comeback after the T/B is in place. I may or may not take advantage of it.

Again, FWIW
Edited by 516properties on Apr 23, 2007 at 04:56 PM

Googled it-try it. It passed a while ago, but just became law on 2/1/07.

From reading it, it focuses on those slime balls that do the "Pay me a chunk of money, I'll save your home from foreclosure, oops I didn't make your payment, sorry" scams. Shouldn't need a bill, just round 'em up and shoot 'em all!

FWIW
Bob

Short answer to #1-yes. Short answer to #2-By all means do it.

An Option to Purchase is between you and the Seller and other than a deposit, no other money is paid. It just gives you a legal right to find a buyer and get paid for it. I use the L/O when the buyer wants someone to make his payment.

The author's suggestion (and RL material suggests this too) is right on. The lease, at least in my state, will allow you to evict the Tenant. The PSA kicks in at some future date when your Buyer is ready to cash you out. Hence the term Tenant/Buyer. It happens in that order.

FWIW
Bob

A HELOC may get discounted if it is not from the original bank. Here recently they (banks) are getting a bit more reluctant to discount alot if they have the first, but go for it anyway. All they can say is "No", right?

Have you started putting together your SS package yet? Also, one thing you mentioned is "she" (HO?) has a potential buyer. Since she can't profit from the FC, be careful about that one.

FWIW
Bob

A couple of things. First, what is the BALANCE of the equity line? Does she merely have it, is there a balance or is it maxed out? What would your exit strategy be on this property?

When you talk about getting someone to "discount" something, that sounds like its pre FC. Yes? No? At a minimum, once you figure out the above, she needs (while you're there, preferably) to call the bank and close it so nothing else gets charged on it if you're going to help her.

Let us know about the rest.

I keep coming back to this post trying to find something positive to say. But, darn it, I can't.

If 60% of the homes in Flagstaff are 2nd/vacation houses there just may not be a market there for you to work with doing options. If the attitudes are like you state, options are probably going to be few and far between. Too, I would think your marketing costs are going to be fairly hefty because it sounds like your potential buyer isn't coming from the surrounding area. More than likely, the only time they would/could look at it would be on the weekend (when potentially your "seller" is there!). I don't want the seller even in the property if I have an option on it.

I ran the numbers (based on your wage scales) and unless there are a LOT of homes in the $100-$125K range, it may just not be worth your time. Of course there are other opportunities (Sub2, SS, Wholesale, for example), to make money on. But usually these types of properties aren't good candidates for L/O unless the area is fairly transient or people don't have a lot of equity built up (one of the primary reasons they wouldn't go with a Realtor). Options just seem, at least in my market, to do better with higher value homes AND a constant stream of people moving into the area.

You could try to approach FSBO's to see if they are amenable to an option or any other strategy. Are there rehabbers or investors where you might better spend your time, efforts and dollars?

If you have RL's blue L/O system notebook, there are a multitude of seller objections and responses if it will help. Not trying to burst the bubble, but from what you've posted, there just doesn't seem to be a lot of upside there in the Options category.

FWIW
Bob

Best of Luck!

SB,
Don't know if this will help, but when I was in the service and getting ready to deploy, part of the paperwork we HAD to complete prior to departing was a POA. She, or at least the base he is stationed at, should have a copy.

So does she have this or does she do like we all do, "sign" for him? Is he copasetic with the sale? If he is, is it reasonable to think he will be back before you find a buyer and close it? If he is not in on this, well......

FWIW
Bob

Hey Michael,
I THINK it was d-o-a-b-l-e vice d-o-u-b-l-e. At least that's how I read it.

FWIW
Bob

The D ue On S ale clause doesn't necessarily benefit the investor-it's a CYA for the mortgage company/bank. Almost all mortgages have this clause which states, in effect, that if the property is transferred out of the name of the mortgagee (buyer) that the mortgage company has the right to call the loan due in full. In reality, they almost never do simply because they don't necessarily know when it happens. Usually, as long as the payments are being made, they're copasetic. Some investors will send a letter to the company saying their management company is taking over the payments, but the original owner is still there. To me, that's a little dicey, but other do it. That's why I take title in the company name to begin with. Then the T/B pays me and I know it's taken care of.

Congrats-your 1st?

In Indiana, we're not having any trouble at all. In fact, a T/B just cashed me out last month after 3 years. I have been dealing with the same Title company for 2 years now, so maybe that helps. The ONLY thing I've noticed recently is the buyer's mortgage company will require a form to be signed by the seller at closing acknowledging they aren't getting what the buyer is paying (just the outstanding balance paid). I think it's more of a "CYA" thing than anything. Too, since I have their limited POA, they usually aren't even there (they truly have moved on with their lives).

Hope that helps
FWIW

Bob