Man on a wire
Real estate investing is not for the faint of heart. Nor is it for the faltering soul. To be successful at it, you have to be willing to ride the roller coaster while pushing forward. Take what happened to us last week for instance.
As I was leaving my house after lunch on Monday, I get a call from one of the pre-foreclosure “doors” we had knocked on the week before. No one was home while we were there, so we left a post card in the door asking them to contact us.
The seller acknowledged that the card was how she knew to get in touch with us. She also told me that foreclosure auction was the following week and asked if we still had time to buy her house.
With less than a week before the auction, I knew it was going to be a tall order. It often takes longer than a week for the closing attorney to order a title examination and get it back. But it was still doable, especially if this was a deal.
The next thing she said brought my days itinerary to an immediate halt. She said she just wanted to be done, and she didn’t care if she walked away with only $500. That statement meant she was very motivated to sell and that we needed to get to her ASAP. I hurried back to the office, and Ashley I were there within the hour.
After looking the house over and asking the seller how we could help, we made her an offer to buy her house subject-to her existing mortgage. That meant we would buy her house and leave her mortgage in place after the sale. We would then make payments on that mortgage until it was paid off. We also offered her some cash to help her get a new place and have some moving money.
She agreed to our proposal and we got to work.
We faxed the necessary paperwork to the bank to get the reinstatement figure. A reinstatement figure represents how much it will take to bring a loan current that is in a state of default. For a house in pre-foreclosure, this amount includes all back payments and bank penalties, which are called arrears.
Most of the time, the seller will have a bank statement that has this information on it. That statement will be missing one thing needed to bring the loan current and stop the foreclosure – the foreclosing attorney fees.
In order to get that figure, the bank must reach out to the foreclosing attorney and wait for them to respond with the amount of fees owed. The bank will add that amount to the arrears and issue the reinstatement figure.
We finally got that figure on Friday – only two business days before auction. We got the house closed and the money wired out from our attorney by noon that day! That was cutting it close.
Monday morning, I called to confirm with the seller’s bank that they had received the wired funds. They told me they couldn’t see them yet but to check back later in the day. It’s not uncommon for a wire to take a little time to post. So, I called back at 4 p.m.
The bank still couldn’t confirm they had the money. Even though I was freaking out on the inside, I calmly explained to the bank rep that we had a confirmation from our attorney’s bank showing the wire went out. I emailed it to the seller’s bank, and they confirmed all information was correct.
The following day, which was auction day, I called the seller’s bank at 9:30 a.m. They still couldn’t see the funds. It was at this point that I let the rep know I was freaking out. I explained that the foreclosure auction was about to start in 30 minutes.
Talk about feeling like a man on a wire — this was nerve wracking.
Finally, my attorney got on the phone with the seller’s bank, and the funds magically appeared within 10 minutes. Ashley and I breathed a sigh of relief.
As it turned out, there were a lot of wires sent the day we sent ours because it was the last Friday of the month. Ours must’ve gotten credited to the wrong place.
So even though we did everything right, had we not been persistent, our house could very well have been auctioned off. And that’s what it feels like to be a man on a wire. (Pun intended)
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.