Pre-forecloures?? any luck?

Pre-forecloures?? any luck?

Does anyone have experience with pre-forclosures?



Yes, I like pre-foreclosure. Target alot of my marketing to draw me pre-foreclosures and closed many.

Anything specific you want to know about them??


well I am just getting

well I am just getting started so any info you have would be great!

Also have a question

I also have a question about pre-foreclosures. I got a one week free trial for a list that turns out to be pre-foreclosures and I don't quite know what to do with it. Should I do a mass mailing? How do I know how if the property is upside down on the mortgage or not? Almost everyone in my area has negative equity on the mortgage which is why some people are just walking away.

Any help would be appreciated. I've been searching the website for answers for several days now....and the list I have is pretty long.


be a

be a problem solver. Find exactly where things stand (trust but VERIFY). You have to know where you are to know where you can go. What deal can be created. Can you reasonably cure? Is payment below market rents? (goes towards creating a LO) Can you merit a cash purchase (meaning LTV merits cash purchase, whether you or end buyer. Can you pull a wholesale out of it). Are they a candidate for shortsale? Stopping a foreclosure, having deed held in trust (negotiated @ discount) and creating an equitable split if partners are brought in, buying the note. Tons of way to get them out and create win-wins if they are motivated and flexible.

Don't get emotionally involved. Know what you are capable of (meaning your resources to assist). Remember a drowning person will inadvertently drown anyone within their reach in an attempt to gain leverage to allow them air. You have to be the floatation device you THROW to them from a safe distance.

Hard on the problem, easy on the people.

God bless,

Pre-forclosures/fore closures and short sales

Pre-forclosures are a tricky breed in itself because in most cases you have to get an offer approval from the seller and the bank.

What I mean by that is the owner can accept your offer but the bank can turn it down.

The owners have received a letter that they are in are about to be foreclosed upon and this is an opportunity to help them out.

Because of the process you want to follow them through that process to take advantage of an opportunity. the house can go to public auction or keep in mind that the owner can seek legal counsel to stop the process with a chapter 13.

Banks will generally want what is owed on the loan which leaves nothing for the seller except to get out of it with a small credit ding as apposed to an 8-10 year ding.

The owner will generally have 60-90 days to sell the house through a R. E. agent. Generally they are a good deal and the homes tend to be in a little better shape than a full foreclosure as they are still occupied.

Do your homework for the comps through your agent or and keep in mind that the process with the bank can be very slow.

have your buyers lined up in advance. there are a lot of preforclosures out there that are again becoming short sales.


That truvalue website doesn't come up for me at all. I've been using a combination of Zillow (not the zestimate, but the listed comps), Homegain and Trulia. No matter what you do, you get a variation in values.

Jen, do you work off of NOD (notice of default) lists? Or do you just market to find motivated sellers that might be a little behind in payments?

Thanks for the comments. For me, I'm just trying to decide if this is the right time for me to put a lot of energy in that direction (the list of pre-foreclosures / NOD) since my time is limited.


What you have stated concerning people in pre foreclosure and banks not allowing them to sell their properties might confuse some people. As long as the bank is receiving the full pay off amount they CAN NOT stop the sale. How can they? Now if it is a short sale situation that is a different story.
I just got a pre foreclosure property under contract today 9/21/11. The pay off is $111,950. The seller can take anything they want over that amount and the bank can't say a word. The bank has no way to slow up the deal, we got the pay off amount and will close in 2 weeks. I actually offered $122,000 so the seller is having the foreclosure cured and walking away from closing with $10,000.

We pursue people in pre forclosure we get off the notice of default lists issued by the counties we work. We look for 30% equity. We turn over the short sale leads (90% of the NODs we see) to our short sale team. We only door knock and market to pre foreclosure people with equity. You have to go through a lot of leads, but there are some GREAT pre foreclosure deals out there with equity that are quick and easy to do and the banks can't say a thing!!

Michael Mangham
MD Home Acquisitions LLC


Knowledge is power, but execution trumps knowledge. Tony Robbins Seller site Buyer site Bird Dog Site Tenant/Buyer site

What percentage do you contact?


Are you using the lists for mass mailing? Then, when someone calls, that's when you find out the percentage of equity? And only if it's 30% equity, do you go and meet them and see the property? I'm just trying to understand all the steps involved. I can only imagine in my area that the percentage that will turn into short sales will be VERY high. Hardly anyone here has equity, which is why I was so uncertain what to do with this NOD list I have.

Do you use a pre-recorded message or do you personally answer all the calls?



We don't do mass mailings. The research we do is based on the foreclosure amount versus the property value. This is only based on the foreclosure amount. It could be the first or the second. Could be a lien. We don't go that far at this point. We see a possible 30% or better equity. We then try to find the phone number of the owner 1st. If we can't make contact we send a mailer. We then doorknock with in 2 weeks if we do not hear back on the mailer. Hearing back from the mailer is rare! Phone or door knock is what works. Of course you must know what to say when you contact them . Believe me it is not Hi, I understand you are in foreclosure and we buy houses cash!! That leads to lots of hang ups and door slamming!
At the point we contact the home owner and have established trust we then determine if there is a 2nd, 3rd, whatever. If there is actual equity. If not we recommend those people to our short sale team and on to the next. We just don't fool around trying to lease/option people that are being foreclosed on and upside down. The cure amount is almost always to high to make a workable option payment. To much time wasted pounding a round peg into a square hole as far as we are concerned.

So, when we determine what is actually owed, we look at the house and determine rehab/remodel costs and make an offer with in 24 hours of looking at the property. IF and I mean IF the deal and the number we have arrived at is feasible. The numbers either work or they don't! If ARV minus repairs minus our selling costs and expected ROI is less than they owe the bank we move on! On to the next! A VERY high percentage of NOD people have no equity! It takes work to go through these and a good system. In Denver, the 4 counties we work we see about 400 per week on average. MAYBE 10% have equity. More like 6%

Finally, I personally answer all my calls, I leave everyone else to the recorded message thing. I know when I hear one, I hang up! If I ever get so busy that I need to pre qualify my leads or screen my sellers I will hire an answering service so my clients can speak to a person.

I will say that we contact around 50 to get 1. But the deals are sweet when we find that person.NO AGENT INVOLVED!!!! I would rather meet and talk to 50 homeowners that tick off realtors making STUPID 50% off list 25 to 1 offers! We make multiple offers on REOs daily through our realtors but that is a different story!

Michael Mangham
MD Home Acquisitions LLC


Knowledge is power, but execution trumps knowledge. Tony Robbins Seller site Buyer site Bird Dog Site Tenant/Buyer site


Great comments and response. I'm going to have to come back and read this again after work!

One main do you find out what the foreclosure loan amount is first without contacting the owner? Since I've had this list I've always had that in the back of my mind that most of these properties will be upside down I won't be able to do anything with them. When you go to the county website, it shows the deed but not the loan amount. Where do you do this research?

Thank you so much for the detailed answer.

Pre- foreclosures

are a great way to help people and make some good money, but, you HAVE to be a problem solver and listen to the problems

if you like helping ppl, use your knowledge to solve their problems and everything will fall into place

just DON'T be GREEDY....HELP them


Mike Free tools

Foreclosed by Condo assoc

New to the business, if a condo has been forclosed by a condo assoc which now holds title, what happens to any senior loan that a bank may have had? A property I am looking at doesn't have a lien listed at the county clerk's office by anyone other than the condo. On the reifax website I find countrywide had a loan, but Bank of America doesn't know anything about it. Trying to research before paying a title company.

Margaret , Working the Pre foreclosure market,

There is a certain amount that the lender files for as they (their attorneys)start the foreclosure process. This "minimum bid" or "cure" amount is a matter of public record. It is usually part of the NOD info that you get from the county. This number is just the starting point. This is what we look at to determine if we pursue the lead any further. Obviously if the "cure" amount is greater than the market value we do not pursue that lead. Others I know pursue all the short sale leads they find from the NOD notices. That is fine and they do well I am sure, that is just something that we do not go after. We concentrate on the ones that have POSSIBLE equity.. Once we look at the notices and narrow our list down to the ones that have a POSSIBLE 30% equity between the cure amount and the market value we then pursue those leads only.
1. We try to find their phone number and call them
2. If we can't find their phone number we mail to them
3. If no response from the mailer we door knock with in 2 weeks of sending out the mailer.

On MOST of these we find they have 2nds and no equity or they have equity and are going to or have already listed their property with an agent. Some we are able to help by putting them together with our broker. He does loan mods, re fis etc. or putting them together with our short sale team.
Most we contact we make nothing on! Sometimes we help them save their house! Every once in a while we get a great deal and purchase their property, get some money back to them and make some money ourselves!

Here are our numbers from working the pre foreclosure market so far this year.

Weekly we get around 400 NODS from 4 counties. We narrow those down to around 25 to 30 per week that we do our step 1 through 3 as listed above. So we actively market to around 100 to 120 a month. So far this year we have closed 6 pre foreclosure deals that we made money on and have provided 5 leads to our short sale team that they closed on. So 11 total deals from this strategy so far this year.

We started with around 14,000 NODs. We narrowed them down and pursued around 1080 leads and got 11 deals. That is a 1% success rate!!! In other words 99% of the leads we follow amount to a big 0 as far as our wallet is concerned!! We are working on how to bring that up to 2%. That would be 50 to 1! Right now we are at 98 to 1!! Can you say perseverance and determination is needed in this business?

SO, this is not easy, you will chase ALOT of leads that amount to nothing. This is where most investors quit!! Good for the rest of us! I recommend you have MULTIPLE acquisition strategies. Estate sales/probates, FSBOs, expired listings, tired landlords, make multiple, intelligent offers on REOs through your realtors, BANDIT SIGNS Etc etc. Set up your systems for each strategy and go for it! DAILY.

A good thing about pre foreclosures, they are usually in better condition than the REOs we look at.

Anyone want to learn how to do the pre foreclosure market the way we do? PM me and we can talk about it.

Good Luck,
Michael Mangham
MD Home Acquisitions LLC


Knowledge is power, but execution trumps knowledge. Tony Robbins Seller site Buyer site Bird Dog Site Tenant/Buyer site

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