Pre-Foreclosure situation….Looking for suggestions

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  • Elizabeth, just make a blog, or a simple WordPress website using a free theme. Domain name can be bought for $10-$18 depending on the extension you choose; hosting company should be different from the domain issuing one. Hosting usually costs $5-$10 for a shared account. If you go the blog route, your web address URL will be long, because of the free “blogger”, or “WordPress” platform. If you go the way of your own domain, you can control the length of your domain name.

    Dee, please do not apologize. You provide so much insight with your research, and comments for all of us, not noticing a comment preceding yours is not a big deal.

    Another update: I am almost done with my 3 day estate sale to get rid of all the household goods, furniture, clothes, etc, etc, etc in the house and I should easily clear $1000 by tomorrow afternoon. My goal was to earn enough from the estate sale to cover all my expenses for the upcoming HBS so it would at least not cost me anything if the house doesnt sell. I am happily amazed at all the people who have come to the estate sale who are also expressing interest in coming to the HBS the following weekend and lots of neighbors in the mix too. Jackie was right about the neighborhood being a great place to find potential buyers. In fact, the previous owners from 6 years ago want to bid too!
    Currently, I have not been able to get an inspection though because the water company wont let me put the water in my name without showing them a deed in my name…I was thinking I might do 1 of 2 things: have an inspection scheduled for the Monday after the HBS so the winner can pay for it and deal with it; or try to convince an inspector to do an inspection without the water on. The previous owner owes a lot of money to the water company and the water company’s suggestion was to, “ask my Realtor to get ahold of the sellers so they will pay their bill” lol. I explained its a foreclosure; that I dont have the deed in my name; that I only want to have water on for an inspection so I can decide if I will buy the home or not; but none of it is working. With permission, we ran a garden hose from the neighbor’s hose bib to do our cleaning of the house.
    Any thoughts?

    Get the inspection done without the water if you must but get the inspection done before the HBS. It is extremely important

    You could get the seller to deed the house to you so you can show the deed to the water department. It does not need to be recorded and you could even tear it up after you get the water on.

    If you don’t have an inspection, then your bidders and buyers will want their contract to be contingent on an inspection. You will run in to the same problems. It will STALL everything and likely kill the sale.

    Call some inspectors to see if they have a “creative” solution to get the inspection done WITH water.

    The inspection needs to be done BEFORE the HBS.. Use the proceeds from the estate sale to pay for the inspection.

    You do not need a website or blog. A HBS happens so fast, it is just not necessary.

    Ok thank you Jackie, I will definitely do an inspection!

    The inspection company will include the roof in their inspection.

    The roofing company is in the business of selling roofs. No need to get them out there. The other inspector will take care of the roof too without a conflict of interest.

    get the seller to deed the house to you. You do not need to record the deed. Then show it to the water department to get the water on.

    start calling inspectors. they may have a Plan B for no water too.

    If anyone is buying a foreclosure property, they utilities are off. but the utilities companies will allow the utilities to be turned on for a few days for an inspection so the buyers can get a mortgage. No inspection. no mortgage.

    the inspectors will know how to get this done.

    If I remember right, this is a highest bidder sale for the highest down payment. What’s the sales price and starting bid for the down payment?

    Update: we found a home inspector who had a Plan B and did the inspection for us including checking out the roof so now we have the report for our upcoming HBS. He didn’t find anything that we didn’t already know about so the house is in overall good shape thank goodness. Moving right along!

    I wanted to do an update on my HBS open house this weekend: I spent 2 weeks ago getting the house as clean as possible but did very little repair work. We held an estate sale and heavily promoted the future HBS sale. I got the official inspection report, had a landscaper take the front and back yards from a waist high weed jungle to almost bare dirt (common here, no grass lawns in this desert), had someone help me repair the holes in the walls and doors, had 3 other people help me do tons of cleaning (like the dog poop on the carpets, and the fridge and stand alone freezer that had food rotting away in them after 4 months of no electricity). I also ordered my HBS signs and doorhangers and put out a free haul it away ad for the last 4 truckloads of junk that didn’t sell at the estate sale. Last week was spent doing 2 CL ad’s a day, fb forum posts, and other social media news, putting up signs and door hangers and hiring a sign spinner. Maybe it was not the best route to go but I needed to make a decision with this property so I decided to try and find a buyer in the situation that I would not be involved in long term and I did a highest sale price bid.

    Results: I needed at least $168,000 just to meet the sellers’ current loan numbers but the highest bid I got was $124,500 (cash). So I was not able to sell this house, something you had warned me about already Jackie, but that I was willing to try at least for the experience along with trying to help our friend’s son, the owner who walked away from his house and mortgage. I would guess that at least half of the people who came by were investors or wanna be investors, and the rest were families that wanted to live in the house.

    What I learned: Door hangers were by far the way most of the visitors who came to the open house heard about the HBS. We had dozens of people just from the neighborhood come by both days! Many of them talked about making this house a rental. Realtors also came by to check things out. Sadly, I had 2 people who I think were either Realtors or investors email me from my CL ads saying they were going to report me for unethical auction activity even after I sent them an FAQ listing all the ways an HBS is different than an auction. I ignored them after that. But the best part of all is that I got to talk to other investors who came by during the HBS open house and pick their brains about the numbers they were thinking about regarding this house. I also let them know I might have more houses down the line if they were interested. They all were.

    Thank you for your realistic suggestions on this deal Jackie, and all your help with an HBS. I am definitely going to do more but they will be with deals that have lots of meat on them for myself and the end buyers.
    Update to the update: Jackie suggested I advertise this as either a seller carry back or a lease to own with 10% down so I am going to try the lease option next. I have been having a difficult time finding a title agent who will do a seller carry back on an FHA loan but maybe I will have better luck with a lease to own/option scenario.

    Update. Thoughts welcome!
    I have been advertising this same house as “Rent to Own” and the neighbors tell me there has been a ton of activity and I have been getting several calls a day so it seems to be a popular option. I now have a couple of buyers who are comfortable paying $10,000 down and between $1200 and $1500 a month. I left that monthly range just to see how high people can go…the current mortgage amount is $1140 a month. I’m STILL waiting for US Bank to send us the current, to date, payoff amount and the reinstatement amount but I know that those terms will still work based on the amounts owed when I first got involved with this property.
    Looking for suggestions and advice on:
    1) How to structure the Rent to Own Purchase Agreement. The current owner (whom I have the Option to Purchase contract with) is perfectly fine doing a Rent to Own as long as he doesnt have to come out of pocket and I understand we can write in that the new buyer will be responsible for any and all repairs, maintenance, etc since they are buying the home, not renting. I understand we can sell it As-Is for a Rent to Own. Is this the case?
    2) The owner is ok with the new buyer paying for the home as long as they want, no balloon or refinance requirements needed. I understand this is actually better for the owner as he wont be accused of setting anyone up for failure should they not qualify for a loan to pay him off in the future. Of course we will add in that the new buyer is welcome to refinance at any point with no pre-payment penalties. Any experience with this? Should I require the owner to sign a full disclosure letting him know he will not qualify for another FHA loan until this one is paid off?
    What kind of interest rate should I be charging (Arizona market btw)?
    3) Any suggestions for getting the bank to move a little faster on getting payoff and reinstatement amounts? I know the title companies can push them a little more but I dont want to raise any red flags there.
    4) Should we have a title company handle the money flow from the new buyer to the bank? Can they also write out the Rent to Own Purchase Agreement or would it be better if I do that myself?

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