Great to see that you are out there working on REI.
In dealing with your subject property, you first need to establish it's true market value by getting some comps "what like properties sell for". Your comps need to be if possible in same subdivision and on the same street if possible. If this fails I would suggest calling on properties for sale in the subject area to see what they are listing for or search realtor.com. This will give you a general ideal of at least what they are listing for.
Also the following net sites may help in working the numbers game www.domania.com, www.homeradar.com, or homeadvisor.msn.com.
This is from my personal experience: I never buy based up apprised value, but market values "what the consumer is willing to pay".
In looking at this deal you have an apprised value of 197k with a debt of 92% of apprised value. Your offer was 76% of apprised value. Your offer was asking the lender to take a hit of 33k (to loose 33k). Not knowing your area, it seems that at best your subject property would have a top end market value of 179.9k. Also in looking at the demographics of the Austin area where I assume your subject property is located. The average sale price for homes 1999 average sale price was 128.6k, in 2000 was 142.8k and in 2001 was 152k. In looking at the 2001 market a declined of 1% accrued in the Austin area. The appreciation from 2000 to 2001 was 9.3% and 1999 to 2000 was 9%. Taking all this in to account it would take several years for you to come out strong with this investment.
In a pre-foreclosure type deal you would have to negotiate with the lender to take a short sale (ask the lender to take less than owed). A short sell is difficult to negotiate for a well-seasoned investor. If this would have been an REO (Lender Owned or Corporate owned). A deal may have been made.
I would recommend that you first research your subject property at the courthouse, determine its market value, determine your customer's motivation and most importantly only work deals that the numbers work (profit).
Good effort on your part, I would suggest avoid the short sale process until you are able to hone your negation skills, There seems to be some great books on this at the TCI web page.
Keep in mind that with every no; you are just getting closer to the yes. REI is a numbers game. Stay in the game and you will get a home run.
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Re: Pre-foreclosure House Strategy?? by beacon on Tuesday, November 26, 2002 @ 10:34 PM EST
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