Seattle Fixer

OK, investors, not sure whether this seller is motivated enough, but here is yet another off-market opportunity in Seattle.

This is a fire-damaged property on South Juneau Street in the 98118 zip code area of Seattle. It has been vacant since 2008, and used since then for storage. The owner has received numerous offers for this property, but not accepted any. Estimates to repair the damage from investors who have visited the property are somewhere around a minimum of $100,000.

The house is tax-assessed at $137,000. Seller is not willing to suggest a purchase price, and that is a red flag for me. As an investor, I tend to discount any owners who are unwilling to suggest a price, especially when they have been presented with numerous offers. This to me means that they are not sufficiently motivated to sell.

Also, the person negotiating this deal is the father of the person listed on title. He claims to be the authorized owner, but this is another caveat to a prospective buyer. Buyer beware! Check the title on this property carefully!

Of course, he collected the insurance money on the fire damage, but did no work on the property. Another red flag.

But if you are still interested in pursuing this, please be my guest. 4730 S Juneau Street in Seattle. Please message me at HomeLandInvestment@gmail.com if you want contact information.

Happy Investing!

What to Ask?

Here are some of the questions that Ron LeGrand uses to filter prospects from the suspects on leads he gets from homeowners wanting to sell:

Will you sell this house for what you owe on it?

What is the least you would take for your equity, if we take over your debt?

Would you consider taking your equity in monthly installments?

What is the least you could take in monthly payments, if we agree to the terms?

May I assume that you will sell with nothing down?

What is the least you could accept down?

What is the lowest you could take for payments?

Knowing what to ask of sellers will help sort out the motivated ones with whom an investor may want to work.

Happy Investing!

Finding Motivated Sellers

Where does an investor find homeowners who are motivated to sell? 

It is much easier if the homeowners come looking for you. Whether you door knock, do direct mail, run ads, or have some other marketing campaign, your success rate will depend on developing a highly-targeted list of the homeowners most likely to sell their houses to an investor at a deep discount. Here are some of the best places to look for motivated sellers:

For Sale By Owner lists, ads and websites

Check out Craigslist, forSaleByOwner.com, Owner.com, for sale by owner on Zillow.com. These are some of the most popular sites used by owners interested in selling their homes themselves, usually because they want to save on real estate commissions. This means that they could be pinching pennies in order to get out from under their mortgage.

Out of state owners

People who live out-of-state tend to be more disconnected and disengaged from their investment properties. Many of these people had to move away unexpectedly and for whatever reason, they just don’t care about their property. Often these people have a vested interest in liquidating as soon as possible. Get a list of absentee owners from your friendly, local title company for a nominal fee.

Abandoned or neglected properties.

Look for owners of properties that are fire-damaged, moss-covered, paint-peeling, empty or neglected fixers. Obviously the owners don’t care about these properties, or perhaps the deferred maintenance is just too overwhelming. These properties can easily be found just by driving around in almost any middle-class or working-class neighborhood.

Non-owner occupied owners of problem properties (city code violations) or problem tenants (court evictions)

For obvious reasons, people are much more likely to part with an investment property than they are with their personal residence. 

Estate properties, especially if the heirs live out of the area. Read the obituaries, or find a good probate attorney who may be willing to send referrals.

Homeowners who have filed for divorce

Underwater owners (who owe more on their mortgages than the market value of the house)

Pre-foreclosure property owners who have received a Notice of Default from their lender

Tax Delinquencies

Many of these owners are at the end of their rope financially. They literally don’t have the time or money to wait for a higher offer. If they don’t sell the property to you, they will lose everything to foreclosure. You may purchase lists of homeowners facing the situations described here. 

Your Sphere of Influence

Talk with friends, family and associates to find motivated sellers among them or to get referrals. Your personal network can be a powerful source for finding good deals. Make sure to tell everyone you know that you are a homebuyer and what types of properties you buy.

Happy Investing!

Finding Underwater Properties

How do you find over-leveraged (i.e. “underwater”) properties?

It is possible to help homeowners who owe more on their property than what it is worth in today’s housing market. These homeowners do not have to do a short sale in order to sell their property. Another option may be to use Ron LeGrand’s “ACTS” (Assignment of Contract and Terms System) program, whereby the Seller offers the property for long-term lease to a Tenant/Buyer for terms that cover the cost of their mortgage, taxes, principal and interest, in exchange for a growing portion of equity when they convert their lease to a purchase.

But how does the investor find these Sellers? Most people do not talk about their financial issues, until they have decided to do a short sale. This is more common since the economic downturn a few years back, and is associated now with much less guilt or shame.

But in order to offer an alternative to a short sale, the investor must find these properties BEFORE a Seller commits to doing a short sale.

Many investors target underwater properties, by sending letters to homeowners who purchased their homes between 2004-2008. It is very likely that anyone who purchased a home during this timeframe almost anywhere in the country, is underwater on their mortgage. So a direct mail campaign can be targeted at homeowners who purchased their homes during this time with mortgages. A list of such targeted properties may be obtained from a local title company.

If the investor has a local real estate broker on his/her team, the broker will have access to their Multiple Listing Service. The NWMLS has property information in a program called “Realist,” which brokers can access with a tax id number for the property. Realist is a program of Core Logic, and compiles data from MLS and county records on both on- and off-market home sales. Realist shows the date when recorded mortgages were taken out on the property.

Realist will not show whether the mortgage is a first or second mortgage, or a revolving line of credit like a HELOC (Home Equity Line of Credit). It will not show whether the mortgage has been paid off. But it will give an investor an indication that there may be a current mortgage on the property, and what the dollar amount of that mortgage was at the time of origination.

Is it possible that properties that were purchased prior to 2004 are also underwater, even homes that have been owned for more than ten, twenty or thirty years? Yes, indeed it is.

Many homeowners used their homes like ATMs to pull cash out for consumer goods during the boom years of easy credit. They wound up with over-leveraged properties when the market changed, and may also be candidates for either a short sale or short sale alternative.

So be sure to include a local broker on your team, if you are looking for over-leveraged properties to purchase for your portfolio. If you would like to know more about alternatives to doing a short sale, please message me privately at HomeLandInvestment@gmail.com or leave a recorded message at 888-621-4999.

Happy Investing!

Wendy Ceccherelli has been a full-time real estate investor since 2006, and is the designated broker /owner of Home Land Seattle. She is also a principal with Van Gogh Development Corporation, developer of Van Gogh Studio Lofts, a transit-oriented development at the Rainier Beach Light Rail Station in Seattle. Prior to her career in real estate, she spent twenty-five years as a government arts funder. 

How to Find Motivated Sellers in Seattle

Perhaps the easiest way to find a motivated seller in Seattle is to search the NWMLS for residential listings that have been on the market for more than six months. Especially now, as the rains and cold dampen the house-buying activity in our region.

There are over 70 such listings of 3-bedroom single family homes priced under $600,000 listed right now in the most desirable neighborhoods of Seattle!

You may do your own search on my www.HomeLandSeattle.com website, or sign up for my VIP Buyer Program for automatic email updates of these listings as they pass that 180 days-on-market milestone. I will help you set up a customized list in the size, neighborhood, and price range that matches your home-buying criteria.

And keep tabs on this blog for information on upcoming Second Sunday Home Tours in Seattle, where we will be focusing on motivated sellers of properties that appeal to investors, first-time homebuyers, and cash buyers.