[Curtis Frieden]

Curtis Frieden

I realize that this will vary depending on the issues going on with each property but there are a ton of pre-foreclosure properties in neighboring cities and I’m wondering if, generally speaking, it’s worth the time to market to all of them and see if I can get some HBS deals going?

[Jackie Lange]

Jackie Lange

The answer is – it depends – but probably not.

Most preforeclosure homes have little or no equity. Many are upside down.
And today, mortgage companies are letting homeowners get 6-12 months behind before they even
start foreclosure so the back payments plus penalities and interests could be a deal killer.

There is the possibility of doing a short sale but they are hard to get, take a lot of time, and there are all kinds of new short sale laws which could prevent you from making any profit.

However, if you can find a preforeclosure home that has at least 30% equity and they are not too far behind on their payments, you could make it work.

If you find a preforeclosure home that has less equity, and is not too far behind on payments, you could sell it to the person wtih the highest down payment. Then wrap the underlying loan. You’d just need to make sure you get enough down payment to cure the default and still make a little profir too.

[Curtis Frieden]

Curtis Frieden

Thanks Jackie – sounds like those are ones to avoid until I get more experience

[Jackie Lange]

Jackie Lange

I agree

It is much easier to deal with properties which are not preforeclosure