Foreclosure Talk

**gackle** · 05-10-2007, 12:31 PM

I'm not in it, but we've toyed with the notion of moving into a foreclosure in order to reduce our drive time to work (neighborhood is generally more expensive than we can afford). I don't know a lot about them, but I have heard stories of foreclosees (is that a word?) ripping all appliances out of the house while moving out. There is a house two doors down from us that was foreclosed on and has been vacant for awhile. I have not seen the sprinkler system run for about a year so there's probably pretty significant foundation problems. Just some things to be aware of. Most foreclosers were probably not treated with TLC.

**Cashflow87** · 05-10-2007, 12:45 PM

im talking about accually getting into the business of forclosures, meaning a house is going into foreclosure, and i would come in and buy your house by paying the rest of what you still owe therefore buying the house for 60% of what its worth then reselling at 100% of its value, making 40% profit on the house...

**Ima saver** · 05-10-2007, 01:19 PM

There are an awful lot of houses on the market right now. I would be wary of doing that.

**creditcardfree** · 05-10-2007, 02:12 PM

I've known of two houses that have been forclosed on. Both were in nice neigborhoods, but in definite need of work. People who are forclosed on often aren't able to do basic maintainence, such as painting the outside of a house...which without proper paint can cause other issues.

If you buy a foreclosure...buy one in relatively good shape. I'm sure there are host of other issues as well including any liens on the property besides the first mortgage.

**Cashflow87** · 05-10-2007, 02:36 PM

yea im going to be doing a 7 week course on the forclosure business...it lets you know everything you need to know, i was just wondering if anyone has experience in this industry...
thanks

**kv968** · 05-10-2007, 02:58 PM

Originally posted by Cashflow87 View Post

yea im going to be doing a 7 week course on the forclosure business...it lets you know everything you need to know, i was just wondering if anyone has experience in this industry...
thanks

I would be leery if the course starts trying to sell you all sorts of programs, books, etc...

**Elgin526** · 05-11-2007, 12:26 PM

From what I understand, with forclosures, you can't get into the house to see what kind of shape it's in, and you can't get a home inspection done. You have no idea what you're buying. You could be walking into a dream or a living nightmare. If you've ever watched any of the fliping shows on HGTV and TLC, you can see the kind of dives these investors buy, and they often put tens of thousands of dollars in renovations and repairs in order to get them on the market.

You need nerves of steel to go into that buisness. I know I couldn't do it!

**Cashflow87** · 05-11-2007, 02:36 PM

what im going to be doing is Researching. im going to contact the bank and nagotiate a short sale on the home, once i get the OK then i contact the home owner and tell them i will save them from going into forclosure by taking over the rest of the payments. once they agree, i bring the nagotiated price to the company ill be working for which is basically a Network of Investors. this company has thousands of investors affiliated with them. once i give the company the house and the nagotiated price, and they Email blast all of their investors saying"you can buy this house at $500,000. its going to need this maintenence: Paint windows and new wiring which will cost you about 10,000." so the the investors think "hmmm i can get this house for 510,000, and i can sell it for 750,000 and make a profit of $240,000....Ill take it!" and once the investor buys the home; I, the "researcher"(the one that found the house and nagotiated the price), get a Finders fee of 10-20% of the profit in this case being $24,000....

Now, imagine, if i can make just ONE deal every month thats a good 6 figure ssalary..or even one deal every 3 months....or even 1 deal every 5 or 6 months, ill still be making more than i am currently working full time.....

**ericmedem** · 05-12-2007, 03:56 AM

I have bought and sold about 30 foreclosures, and have flipped 9 this year with profits near 140k, It is a great time to buy. I am currently rehabbing 9 homes to flip

**Cashflow87** · 06-04-2007, 01:31 PM

anyone else out there with any input?

Thanks in advance

**The Credit Guru** · 06-07-2007, 07:57 PM

Originally posted by Elgin526 View Post

From what I understand, with forclosures, you can't get into the house to see what kind of shape it's in, and you can't get a home inspection done. You have no idea what you're buying. You could be walking into a dream or a living nightmare. If you've ever watched any of the fliping shows on HGTV and TLC, you can see the kind of dives these investors buy, and they often put tens of thousands of dollars in renovations and repairs in order to get them on the market.

You need nerves of steel to go into that buisness. I know I couldn't do it!

This is the truth. most of the time you can't look at what your buying. I did have a friend who had a pretty good system going though. First off he had a Really good loan officer that did all of his loans. He would find out what was owed on the property and what the estimated market value of the house might be ( he always under estimated just to be safe). If the Loan-to-Value was around 30-40% he would buy it and the loan officer would get him a loan with no pre- payment penalty so he could refinance it a few months later. When he refinanced he was pulling out enough cash to do improvements to the house (or fix what was broken) and about 6 months principle and interest just in case the house sat on the market. His loan new loan would never exceed 65-70% LTV. Adding improvements to the house would then raise the value and equity. He would list the house about $10-15K less than comprable homes in the area to ensure a quick sale. Example: Money owed to bank: $100,000 Estimated Value: $300,000 Refinance amount: $200,000 (67% LTV). He would put away about $10K for 6 mortgage payments and use the rest to fix up the house. After he put in the improvements the house would be worth $400k - $450K. He'd Put it on the market and start the next one....only bad thing would be capital gains...

**Cashflow87** · 06-08-2007, 09:31 AM

well i believe that i would be meeting with the home owner at the house, and see what might need to be done(new wiring, roof, etc) and i make a report.

lets say the home owner still owes $200,000 on the house. and the house needs $50,000 worth of maintenence(new windows, new roof, new wiring, plumbing, paint....or whatever) that brings the total to 250,000. so i take this amount back to the company im going to be with, which is basically a network of thousands of investors, and the company sends an email blast to all the investors saying "this home for sale for 200,000 an estimated 50,000 worth of rehab will be needed...who wants it"

so an investor buys the house for 250,000 and puts it on the market for 450,000 and makes a nice profit of 200,000 and gives me a 10% finders fee since im the one that found him that property. 10% of 200,000 is $20,000 off of one deal... i could make just one deal a month and be making really good money

**DebbieL** · 06-08-2007, 09:50 AM

If it were that easy in real life everybody would be rich. Beware. These schemes have been around for AGES. The odd person might do okay at this, but I would focus my energies on improving my work skills, employability, etc instead. A reliable, steady income from a legitimate job fills me with much more of a sense of security. The housing market is going down, not up. I wouldn't touch this one if I were you.

**Cashflow87** · 06-08-2007, 10:04 AM

yea ive heard that a lot, but im going to put a lot of dedication into this and i start some classes in july. im going to see what happens. and if it doesnt go too well or if it goes extremely well it will be a learning experience either way, ill let you guys know how it goes...thanks for the input

Foreclosure Talk