Wholsaling - Best type of Assignment Deals

My vote is for preforeclosures. It gives you a lot options by often dealing directly with the home owner.

I would have to agree with the pre-foreclosures as well. The other ones listed are going to be held with the sate or government or lenders and they are not as willing to have that assignment clause in the contract. You can work with the assignment of contract with anyone that is a motivated seller.

Probates are good too. Most family members don't want mom or pop's old house, they want the MONEY so they're VERY motivated!!!

Each of the section of foreclosure have pros and cons.

REO properties are the most competitive of all three types of foreclosures. Realtors readily have these to show. They are the easiest to see so you can determine the repair costs and the purchase will be the same as if you were to buy a property from your neighbor.

Auctions are the least competitive of all three types of foreclosures. The main reasons to this is the amount of money required at the auctions and the great need for due diligence.

Pre-foreclosures are average competition. Most "new" investors will come to preforeclosure because they heard it was the place to invest. Because the "new" investor may now know what they are doing they may find preforeclosure difficult to do.

All three areas of foreclosure can make money and make money well you just need to understand what you are doing, focus on the area you want and you can do well at any of the foreclosures.

This is the area that i have choose to specialize in, and it's NOT because their "fun", it's because they are the MOST PROFITABLE among the other 2 parts of the foreclosure process, and i KNOW that i'll get someone to disagree with me on this, but pre-foreclosures, NOT only are they(i believe) the MOST PROFITABLE, but also the easiest part of the process to get involved in, you dont need to be "PRE-APPROVED" to put an offer in, like: REO's, VA's, HUD, BANK OWNED, and you can also do deals with virtually "NO MONEY" like: buying a pre-foreclosure "SUBJECT TO" or "LOAN ASSUMPTION", you can also get pre-foreclosures "UNDER CONTRACT" and "RE-ASSIGN" them, if you tried to do that with an REO it would probably get rejected, unless your a seasoned investor and have the "KNOW HOW" to get around the banks objection(which i do) lol, just kidding (but i do know how to get around this ) I guess what i'm saying is: I believe that pre-foreclosures offer the best chance for a "newbe" or a seasoned pro to make excellent profits with bad credit and little to no money out of pocket.

and informative. Thanks! One of the best posts in here! Goes in the notebook!!!

I think probate or estate sales are probably the best. Today preforclosers usually involve "short sales" which require dealing with the lenders. Lenders are hesitant to accept assignments.

Al

Hello everyone. I am just getting started as per say a "newbe" REI. I haven't done any deals, but I do want to do one, I just don't know where to start. I am thinking a pre-foreclosure to maybe to an assignment? I'm not sure if this has been covered elsewhere in the forums. If it is could someone link me? If I am in the right place, could anyone give advice or something to give me a boost in the right direction? I guess what I'm really looking for is an answer, is a pre-foreclosure what I should be starting out with having no REI experience and no deals under my belt?

Welcome to the DG family, glad to have you here. I think the answer to your question lies in the title of this post. Read through the forum and Dean's book (if you have it) that should give you the direction you need to start.

God bless you,

What is a good way of finding probate properties?

I have tried to find a way to search for these properties on MLS. I can not find any wording or clues that lead me to them.

Al

Anytime there is a death and the owner has property without a Trust, the property will go into Probate. You can look in the newspaper under deaths. It will show the persons name and address. With that info, you can go to your county courthouse and look under the property address to see who holds the property. This is all public information.
In my area, you can look up the records on Probate in the Records office. Once you know the property will go thru probate you can contact the attorney handling the process or you can write a letter and send it to the property address asking if they are willing to sell.

Patt gave some great ideas about probate.

One the best and fastest to the action is working with the probate lawyers. Probate is so confusing for most people it usually will involve a lawyer. They are the first that knows about probate and they know what the court have done with assets usually before many other people. By marketing to these professional you can eventually have them drop your name or business card to families with probate properties. Keep in mind that if you market to anyone you should market at least 5 times to that individual. You can also take an adaptation of Dean's Automated Foreclosure Finder program to help you market.

Thanks for the information. When contacting these probate lawyers, how should I approach them or sending letter directly to the address? Should it be the same way contacting any other property owner?

I called an ad today about a house for sale well below market.I spoke to a man who told me that the house was a pre-foreclosure and that he had many more. He told me that this particular house already had a letter of approval from the bank to be sold for $48,000.00. The RV is $96,000.00.

He was not a Real estate agent but yet he was not the owner of the properties. Not sure what part he played in the deals. Anyway this property must close by 10/22/08. He also told me about 4 other properties and gave me their addresses.

Question;

Can I assign short sales? If so what is the process? Do I deal with the bank or can I still deal with the owner?

This man said that he already had a letter of approval from the banks on these properties. What does that mean?

Till this point I have only seen short sales listed with Real estates where I had to be pre approved by the bank. So I thought that they could not be assigned.

This sounds like a company that specializes in short sale negotiations. I used one once on one of my listings. I think he is saying that the bank has already agreed on a sale price when he says he has a letter of approval. I believe the bank is still going to want a pre approval letter, or proof of funds. Ask the negotiator (if that is what he is) if the bank would accept an assignment. These guys are pretty good at getting banks to cooperate. If not, maybe you could do a double closing.

Good Luck, Al

Still confused...

I want to get into assigning short sales. There is some pretty AWESOME stuff out there right now and I want in!

I still do not understand how I can assign a short sale. The banks require a pre qualify or proof of funds before they will even look at your offer. I hate being out of this loop. I want in!!

If I find a short sale listed with an agent how do I assign? What is the process in this scenario?

If you want in, then your going to need a PRE-APPROVAL letter, Al's on the money, when he said "your still going to need "proof of funds" to even have your offer looked at, and lets say that a lender WILL accept your offer without a PRE-APPROVAL letter, If you want to ASSIGN these "short sales" 1 way of getting around this would be to: make the offer in the name of an LLC(you would put the properties street address in the buyer field), example-125 chestnut st, LLC. Then you would sell the LLC to your "end buyer" for your normal ASSIGNMENT FEE, OR you could also do a "DOUBLE CLOSE", however going the route of selling the LLC your saving money on CLOSING COSTS, SULLY

Would this mean I would have to buy an LLC for every offer I put in.

Let's say I want to buy 123 chestnut st.
I buy an LLC for 456 market st. and put that in the buyers field?

Do I still have to put and/or assign? If I plan on assigning the property?

How would banks look at this differently? How will this satisfy the need for proof of funds or PRE-APPROVAL letter?

Be patient with me ... I am a newbie

With the economy the way it is, I know there is an awful lot of talk about this Mortgage Company Bail out plan. Are lending companies backing off right now waiting for the dust to settle before issuing anymore home loans ?

The reason I ask is, because I feel there are an awful lot of people holding their breath, afraid of making a move, waiting for things to get rolling again.
Or is now a good time to go shopping for competive rates on home loans ?

Hi, I am a newbe in this industry and I need assistance in finding what is the 1st thing I need to do in order to get my feet wet.

It doesn't matter what "type" of assignment you do. They all pay cash. Don't get caught up in the details and don't make it seem harder than it is. You can assign anything as long as you have a property way below value and a buyer that is anxious to buy. That is all there is to it.

Hi,
I'd like to get an opinion about this : I have a question in evaluating market value of a property. I have learned that the comps report from realtor is one way of knowing the FMV of a certain property. What if there are tons of foreclosures properties that were recently sold in my target area that were priced so low (which I'm now seeing in my realtors report). I'm looking into one REO which I thought is very cheap but when I looked into the comps report it's not as low as I thought because I'm comparing it with the sold price of foreclosed properties. If I'm using a hard money lender, it is kinda difficult to show that my property is a good deal. Should the appraisal report will be the most reliable report in this case then?

Yeah, you have the basic idea, however your NOT purchasing the LLC BEFORE, but rather AFTER your offer gets accepted with 125 chestnut st, LLC, you would then purchase the LLC as 125 chestnut st, LLC, understand?

Now as for, the PRE-APPROVAL problem, thats a seperate issue all in it's self, so yes, your still going to have that problem, keep working on your credit, some(very few) banks WILL accept an offer without a PRE-APPROVAL LETTER, SULLY

Mr. Sully,

I thought you said to make the offer in the name of an LLC. That would mean that I would have to get the LLC before I make the offer wouldn't it? Then you said to create the LLC after the offer is accepted. I am confused.

Your student Carol

You create the LLC at the time you get the property under contract. When you close, the LLC becomes the buyer, with you as the managing member of the LLC. Once you acquire the property, you sell the LLC to your end buyer. At least that's my "take" on it.

So, am I to understand that in order to create this LLC, what you are essentially doing is creating an insurance policy shielding you from any liabilities ? And just like doing an assignment, once the deal is finalized you are basically passing the LLC off to your end buyer, along with the property ?

For Sale by owner homes that have motivated sellers, MLS lISTINGS THAT HAVE EXPIRED-MOST OF THE TIME THESE SELLERS ARE MOTIVATED TO SELL