How to Buy Bank Owned Properties, Foreclosure Financing, and Finding Private Money Investors

hello internet my name is ryan ingram self-proclaimed foreclosure expert now the only reason i say that is because i recorded a video and it's the best performing video on this youtube channel so thank you so much for that and on that i get a lot of comments some of them are phenomenal and this morning when i was sitting down trying to figure out what i wanted to talk about today i was asked a phenomenal question so i'm going to put this question really big on the screen and let's read it together emanuel said just recently started real estate and i have taken steps pre-foreclosures are my target i visited the sheriff and the courts and the banks to find out more on the foreclosure process and it is as the books i have read say and how you put it i don't have money to invest in real estate but i picked up financing skill is i picked up on the fact that the financing skills are the key to making real estate deals using other people's money i've been told that i can't be given contacts of homeowners while in pre-foreclosure and the only time is when the properties are listed in the newspapers how do i go about this i have only three questions how do you buy bank-owned properties how do you get financing from investors and how do you find these investors these all make perfect sense and are phenomenal questions worthy of a great answer so let's break these down into questions and i think there are actually four even though he says there's three i've been told that i can't get the contact information from the homeowners that's true so let's go through all these all right so let's just start from the top on the fact that the municipality won't give him the homeowner's contact information and i'm actually very thankful for this so i'm not a fan of big governments or governments having any of my information at all but there are several public records and there are tons of databases that scrape all the information on the internet and if you know my name and what county i live in then chances are you can figure out where i live so there isn't really any information that isn't accessible from public records unless it's been like uh redacted by the government but even then i mean there are just so many third-party vendor websites that you can go to to figure this information out so i'm not necessarily sure how unless you're like the cia the fbi or have access just to destroy everything and everyone then i'm not so sure you can hide truly so it would be wrong for the municipality to give you the homeowner's contact information and i honestly doubt that they have phone numbers and emails for everyone they just have a first and last name but this is also public record so if you go to the auditor's website or the treasurer's website and you put in the address or the parcel id number then you can likely find the name of that individual and then there's this thing called skip tracing that you can do on an address and figure out all of the people that have lived there and you could strategically start calling them or emailing them because these skip trace services pull the homeowner's first name last name the address and they just scrape the entire internet and find anywhere that there are phone numbers email addresses and all of that so the few times that i've done this there are pretty much all of the phone numbers that was ever associated with that person i've even done myself and i've got childhood landlines that are that actually populate when you skip trace ryan ingram but don't do that because you can just email me below because my email is available to everyone don't stalk me just email ryan at seekwisdom.us so after you successfully skip trace somebody you're going to have entirely too many phone numbers and entirely too many email addresses and you just have to go through those so you kind of have to become a sleuth in order to really take advantage of the pre-foreclosure process so manual of pre-foreclosures are your target then you're going to want to get pretty familiar with taking addresses that you're interested in skip tracing using websites that you do have to pay for like the been verified and you know white pages and then there are really particular skip tracing services as well that you can get the contact information and then you just have to kind of show up unannounced it's kind of like a cold call so the more of these you do the better at them you'll get yes you are going to get hung up on people are going to get frustrated i've had several people say how do you even get my number and uh there's no real easy way to explain that i just found it on the internet seems really suspicious to most people but most things now they are just to google away including the homeowner contact information okay how to buy bank owned properties so these actually fall in the foreclosure so when the bank forecloses on the property before they become bank owned you're right you are already in the right spot at the courthouse so the bank is going to have to file the foreclosure process and all the paperwork with the courthouse which then that's what puts it on the pre-foreclosure list and what banks do is to get ahead of the marketing they will start advertising these as pre-foreclosures to drum up interest in the property so that once they have it they can sell it quickly hopefully that's how it should work so a lot of the bank owned pre-foreclosures are actually on zillow or the mls or the banks are just trying to get ahead of the curve so when they actually take possession of the property then they're going to be able to sell it immediately so you're going to be able to see it go from pre-foreclosure if it doesn't sell in the actual foreclosure process in the courtroom then it's going to they generally contract out with a realtor and list them individually on like zillow or trulia and a lot of the smaller banks or even some of the larger ones if you're a big enough player will actually package a bunch of bank-owned homes together and then they will go out of their way and try to find an investor or a hedge fund that is willing to buy all of them at once rather than individually selling each of them i have friends that have purchased homes this way and i know of i've watched several interviews with like hedge fund people that have purchased they have talked about buying a large quantity of homes from banks but i have no knowledge on how to do this i guess you just have to have a good relationship with the primary contact at the bank who's responsible for overseeing this part of the bank's operations but unfortunately emmanuel i am not that big time and i do not know how to go about finding those people but if you figure it out please let me know because i would like to buy a package of properties at a below market price that sounds like a good idea now this is the fun part and the question that my brother and i get a lot because we are all the time talking about the money that we get from friends and family we pay them 10 and 12 and there's no real easy way to find these people other than the fact that you probably already know them i would suggest that you start by reading matt faircloth i think is his name yep that's his name i'll put a link to that book below and i'll also link to his youtube channel the derosa group he goes in a great amount of detail about how to raise private capital and who has it for example the first investor that i had was my best friend and he recently switched jobs so he was able to roll over his 401k he called me for some reason and asked me what he should do with it and at the time i had recently been learning about self-directed iras and that's when i started becoming weary in the stock market or leery of the stock market so i actually suggested that he roll it over into a self-directed ira and i gave him a few contact information of these uh trust companies that actually are the custodians of those accounts and then i allowed him to do his own research he determined that that was the way that he wanted to go so he rolled all of his previous 401k uh in retirement contributions from his previous job into this new self-directed fund and then he has lent those to me so i would say the more research you do the more educated you become then you are kind of going to slowly position yourself as the go-to individual and whenever somebody wants to know what they need to do with their 401k or what they should do with their 401k then you can interject hey i'm not saying that you should do this but if you roll it over to a self-directed blah blah blah then you could invest with me and you know i can probably pay you 10 to 12 and it is secured by real estate or whatever your numbers are you don't have to copy my system but that is generally my soft pitch but as you are educating yourself and how self-directed iras work you're also going to want to check out the sec and figure out their guidelines because the last thing you want to do when you're raising capital is accidentally violate the sec's guidelines and then get in big trouble or face massive fines so please educate yourself on all things private money before you go accepting investors money but that is how i do it friends and family 10 and 12 percent a lot of these people i say i've got a few multi-millionaires that invest with me a few millionaires but by and large i would say the majority of my investors are people that the 30 50 grand that they lend us is means a great deal to them and because of that i'm extraordinarily careful with it and very cautious i don't invest in things that i don't know i don't speculate on any properties that is why i have really targeted one specific area that i know like the back of my hand which i don't even know why that's an expression i don't think i could draw the back of my hand without tracing it so i know the market better than the back of my hand because i don't really know the back of my hand i don't think i could identify the back of my hand in a lineup of backs of hands and then i've also done an extraordinary amount of research on our particular market that we're investing in and i do not think that it is uh even in the face of this pandemic i don't think it is speculative in any sense i think this is a depressed market and has been for quite some time and i truly don't think that this market can do anything but go up so that's a very long-winded answer to say i think that you already know who your private investors are going to be you just have to slowly put together this presentation approve your track record and work diligently so that these people build faith in you and want to put their hard-earned money with you because they see you as a better investment than the stock market i realized i just answered number four how to find them so actually how to get financing from others i would say we use promissory notes that are backed and secured by individual properties so each amount of money that we take is also secured by real estate so if you were to go onto the recorder's website and type in the address then you would see the associated lien with that property for each one of our investors that way if we default for whatever reason the investor we already have all of the legal paperwork in line for the investor to seize the property and if we have to default which we won't because again i'm not speculating and i'm going to do everything that i possibly can to make my investors money and not lose it i would i would pay my investors before i feed my family that's how dedicated i am and the proper mindset to truly respect and honor the money that the your investors your friends and families are trusting you with so the actual legal documents that you have to put in place are pretty simple and and i probably pay around 300 per property for an attorney to draft up these financial legal documents and that is the answer to number three how to get financing from others just a few sheets of paperwork is all it'll take after you've actually encouraged and presented someone with enough reasoning to trust you with their money now every now and then i get a request for hard money lenders and i don't use any hard money lenders i've tried to in the past and it just didn't work out financially because the difference between hard money lenders and private money your friends and family as your friends and family are trusting you they are relying on you to present them with the proper paperwork to walk them through the process and because of that you are not charging and because of that you are putting in kind of the sweat equity of that transaction so you're there aren't going to be any origination fees loan fees or anything like that it's just you and your time preparing all of the groundwork so that an investor or friends or family member can give you money where when you use hard money they charge upwards of four percent origination fees so if you borrow a hundred thousand dollars then that is at least four thousand dollars and not to mention when you later refinance with a traditional lender because the hard money it's like four percent origination and also ten or twelve percent so this is extraordinarily expensive money and full of like one-time fees that you're not going to be refunded or be able to recuperate because you aren't actually adding value to the asset you're just paying for the privilege of owning the asset which i guess if you get a great enough deal so if you get a property like 30 to 40 percent of the value then it might be a reasonable thing to do is use the services of a hard money lender but otherwise i would rather circumvent the fees put in the legwork and build a network of people that are interested in building and giving me money that way i don't have to pay origination fees or points each time i want to use that money because don't forget when you have to refinance with a traditional lender then you're going to have to pay closing costs again and if the average closing costs when you are refinancing with a bank are about five percent so that same hundred thousand dollar loan you just paid the hard money lender four points so four thousand dollars and now you're gonna have another five thousand dollars in uh bank traditional closing costs so now you're nine thousand dollars out of pocket just on one transaction if it's a good enough deal sure the numbers might work but i would prefer to save that money reinvest it in the property add some sort of value rather than just throwing it off to somebody else who all the hard money lender really did is build the same network worth of people they're just not going around trying to find good deals like you are and they are just making an override percentage on the origination fees it's a viable business model if that's what you're after but i don't think in your stage where you're at hard money lenders are probably not the best solution i would encourage everybody to find some sort of network put together some sort of presentation and really start getting a lot of people to believe in you and want to give you their money because it is going to be a very powerful thing when they start talking amongst their friends and their friends become your friends and all of a sudden everybody wants to give you money because what you're doing is so secure so stable and so consistent that's that's a beautiful thing and i think everybody should experience that once in life so do that over hard money lenders thanks emmanuel for the question this was a phenomenal video in my personal opinion i hope this was helpful and if you have any more questions please don't hesitate to throw them below and that goes for everybody else as well and also check out this foreclosure video that caused this question especially if this is the first time on the channel so thank you so much can't wait to talk to you guys soon thanks

Channel: Ryan Ingram

Views: 4,357

Keywords: foreclosure financing, financing foreclosures, foreclosures, how to buy bank owned properties, bank owned property, buying a bank owned property, find private money, finding private money investors, foreclosure auction, foreclosure homes, how to buy foreclosure homes

Id: iOcI2KTs_mA

Length: 15min 46sec (946 seconds)

Published: Thu Oct 01 2020