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Old 05-16-2006, 06:22 PM   #1
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I'm new

I'm new to this forum but not to the idea of retiring early.
I currently work with my brother in Detroit investing in pre-foreclosures. I have a plan to retire in 10 years. I have been bummin around this site for a day or two. I'm glad I found it and that there are people to converse with that have the same mental attitude as myself.

Look forward to being part of the community.

BT
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Re: I'm new
Old 05-16-2006, 07:04 PM   #2
 
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Re: I'm new

Welcome to the forum. I don't have a clue about pre-foreclosures, as real estate to me is a place to live!
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Old 05-16-2006, 09:43 PM   #3
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Re: I'm new

BT, there's a thread in the "Other" section about a potential foreclosure. I'm curious about the mechanics of pre-foreclosures. Do you sit down with both the lender and mortgage holder and try to negotiate a settlement in exchange for equity? How much is the bank usually willing to give up to prevent foreclosure, and how much equity is the home owner usually willing to give up in exchange for your services?
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Re: I'm new
Old 05-17-2006, 07:33 AM   #4
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Re: I'm new

Noramally the people we work with are completely maxed out in debt and do not have any equity. We let them know we can buy the house be we will be buying it for less than they owe. We then negotiate with the lending institution to pick the house up for less than what is owed. I would say we usually buy houses at 75% of their market value. We then sale them to other investors who fix them up or keep them as rentals.

If the homeowner has equity they are usually willing to give up all but 2 to 5K of equity to sale the home. We still buy it for less than what is owed.

It all really depends ont he condition of the home.

I hope that answers your questions.

Brad
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Old 05-17-2006, 09:30 AM   #5
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Brad,

Where in the Detroit area are you doing the preforeclosures?

I live in the metro area and am thinking about real estate investing.

omni
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Old 05-17-2006, 12:34 PM   #6
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Re: I'm new

Quote:
Originally Posted by bwtucker83
I would say we usually buy houses at 75% of their market value.
Thanks for the info. That sounds great -- much better than waiting for the home to get to auction. So, are the banks willing to give up 25% of their loan just to short-circuit the foreclosure process? I assume most of these houses have appreciated a bit, so the bank isn't losing that much. How much are the banks willing to lose on their loan, if any?
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Old 05-17-2006, 07:22 PM   #7
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Re: I'm new

Omni,


We do houses all over the metrot area.

Wab:

They will take quit the hit if the house needs repairs and is in a poor neigborhood. It really just depends house to house and lender to lender. Once we got a 2nd mortgage reduced to 1K from 150K. That was quite the deal. I'm happy to talk about it if you have more questions.

Brad
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Old 05-17-2006, 08:50 PM   #8
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Brad,

Welcome aboard.

You'll find a wealth of information on this boad and some very intelligent posters.

omni
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Old 05-17-2006, 09:37 PM   #9
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Quote:
Originally Posted by bwtucker83
They will take quit the hit if the house needs repairs and is in a poor neigborhood.* It really just depends house to house and lender to lender. Once we got a 2nd mortgage reduced to 1K from 150K. That was quite the deal.
Excellent. Sounds like the banks just make a SWAG to figure what they're willing to walk away from. I love inefficient markets like that. You'll make a killing.
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Old 05-17-2006, 09:47 PM   #10
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what do you mean by SWAG?

Some lenders will take a set percentage of the appraised value as the short. Banks REALLY don't like having reo's, especially in Detroit.

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Old 05-17-2006, 09:50 PM   #11
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Quote:
Originally Posted by bwtucker83
what do you mean by SWAG?
Sorry, technical engineering term: scientific wild-assed guess.
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Old 05-17-2006, 10:04 PM   #12
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Re: I'm new

Or "Simple Wild Eyed Guess" depending on just how wild it is.
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