The importance of due diligence

Just because someone is willing to sell their house and walk away and not want anything out of it doesn’t mean it’s a good deal. The importance of due diligence, of knowing how to do your own due diligence, I can’t stress that enough.

I Just left a homeowners house and we’ve been having a conversation regarding buying their property ( I created a whole webinar to show you how I found the deal and how I was able to get this client to work with us, If you want to watch that video and learn for yourself how you can get deals in this market right now, subscribe below and I’ll send you over the private video that I created of how we found this property)

But now that we are working with the client there’s a whole bunch of things that are coming up.

1- They haven’t paid their mortgage in over a year, and I don’t know how accurate that is so we are trying, we are working with our title company to get information as much information as we can as to how many mortgages are tied to this house and how many liens may be tied to this house. We are a little uncertain about that right now so we are working with them on getting that info.

2 – The person that I spoke with is the daughter of the owner who is living in the house so she doesn’t actually have the right to sell the property but her brother does. So her brother, I’ve been in communications with him as well because that’s one of the things that I requested from the beginning was that I needed to get in contact with the decision maker (This is something you should always have clarity on when meeting with sellers because oftentimes even though they may be living in the house there may be other decisions that are not living in the house so I always ask “Are you the only person that will make that final decision on the sale of the house?”). So I’ve been communicating back and forth with him and he was the one that told me about the mortgage, both of them tell me they don’t want anything out of the sale of the house and that they just want to satisfy mortgage and move on but they never mentioned that they hadn’t paid the mortgage in over a year, so now that’s something we found out today.

The next step that we’re taking from here is getting as much info as we can regarding mortgages and liens.
What I want to know as soon as possible is how much is owed on the house so I want to speak directly with the bank and request a “payoff letter” and if that number makes sense accompanied with our repair estimates will be able to buy the house as is.
If not we need to go into short sale and go through the whole short sale process.
The other variable in this situation is the sister has a son and his friends are actually squatting in the house and she told me “hey look I’m able to move out as soon as possible but the people here I don’t know, they are not my responsibility. I will be able to move out and you can do whatever you want with the house.” And I’m like no no no it’s not gonna work out that way…..once we determine all the ins and outs of your mortgage and liens we’re going to need this property vacant and if not were not buying the house. So they’re like “ok no problem we’ll work on that” and everything like that so, negotiations and doing your due diligence is crucial in this business not only do you have to be able to find these clients but once you find them u have to be able to help them overcome all these challenges in order for you to buy the house.

Real estate investing is all about solving peoples problems and this is an example of it!

To learn more about how to do this for yourself I created a free 5 step video series where I will show you how you can find properties, fix them, fund them, negotiate them and ultimately profit from them.