Mailing to homeowners in pre-foreclosure has always been a mainstay of my business. Back in 2008, a homeowner filled out a “Sell Your House” form on my website. As I was not doing a lot of Search Engine or Pay-Per-Cick advertising at the time, and had mailed several letters to her, it was easy to conclude the form was generated by the latter medium.
Looking at the form all by itself, it didn’t look like a deal. Many investors would have deleted it and moved on. Her house was worth around $300K (according to her), and she was asking $280K. Usually, that spells non-motivation. However, in the field asking for “loan balance”, she put in the low 50s.
So, my attention was riveted. She could afford to sell the house at a price at which I could buy it, and was facing impending foreclosure. I picked up the phone and called her. And called her. And called her. And emailed her. I begged her to contact me, not even mentioning price, just trying to open dialogue. She would not return my calls or emails.
So, like a good investor, I drove out and knocked on the door. 4 different times. I left notes on the door, “I want to pay you cash for your house! Please call me, I want to get you some money before the foreclosure sale!”. I never heard from her.
I prefer to buy from the homeowner if possible, but a deal is a deal, and I could in good conscience say that I had done my darndest to work with her. So, down to the courthouse I went. I’ll save the intricacies, but there was a first and only mortgage foreclosing, and a HOA foreclosing. By using an advanced process known to few investors, I acquired the property for around $55K, and ended up paying off her $30K IRS lien. $85K all-in for a property worth around $300K and needing $15k in cosmetic work. I would have paid her more. I tried to.
After the auction, she was clearly still living in the house. I stopped by the house to touch base and attempt to give her moving money. A dog barked at me, but no answer. The house was full of nice possessions. She got them out during the period allowed by the Sheriff’s Dept, and left the house in pretty good condition. To this day I wonder what could have possibly been going on with that Seller to refuse more money and kindness for less money and a Sheriff’s escort off of the property.
Lou Gimbutis is director of education at the Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. He can be contacted at lou@MetrolinaREIA.org. For more information, visit www.MetrolinaREIA.org.