Talk about loan sharks. 

One lender wanted 5 points down and 17%, and a private lender wanted 2 points down, 15%.  I did find one that would give me no point down and 13.49%, but that’s unconfirmed until tomorrow.  I would happily take that loan.

But until I sign a contract, I have no financing.  If you are reading this and have some ideas of where else I can get financing, please write and let me know!

The auction is finally coming on the 10th of this month, but I still don’t have funding.  I can put down the 5% but in Palm Beach county, you need to come up with the rest of the 95% by the end of the day.  Typically conventional lender won’t lend with out a sales contract, which of course, you don’t get until after you have paid the winning bid price.

I’ve gone through the newspapers looking for people who would lend short term loan for this, left phone messages with a bunch of them, actually one guy picked up (11:30pm!), and we’ll talk again tomorrow.  It’s coming down to the wire; I hope I can find a money partner, or else no deal.

Two weeks ago, when I was at foreclosure #1, the owner told me that they had refinanced the house.  I thought that was a done deal.
Today I remembered that the summary judgment in court on the property was supposed to be this week, so I called the plaintiff lawyer to get an update.  It turns out that the owners didn’t pay off their debt yet, so there will indeed be a foreclosure on the property.  I am in luck!  In another week, I should find out the foreclosure auction date and in the mean time, I’ll have to figure out how much repair work the house needs, but from the comps in the area, I have a lot of room for error on this one, so it’s pretty much a go.
Exciting times ahead…

Since pre-foreclosure #1 fell through, it’s back to the drawing board.  I have found the online website for miami-dade county clerk’s website which lists the upcoming foreclosures auctions on the steps of the court house.

After a little bit of research, I wasn’t able to find such a listing for Palm Beach.  I made a few phone calls to the PB County Clerk’s office again, got transferred a few times, and found out that they actually publish it in a specific newspaper called Daily Business Review.  This paper isn’t sold in the grocery stores.  I tracked down their website and found retail locations that sold them. 

At the Barnes and Nobles where I found them, there’s probably less than 5 copies left.  It’s definitely not a widely publicized newspaper.  And it’s behind the cashier’s counter, so you really have to know what you are looking for to find it. 

Now the next step is to figure out how much discount (if any) the properties at the auctions have been sold for! 

Over the past two weeks, I have been pretty excited about a pre-foreclosure property that’s on the inner-coastal waterway, but as a beginning investor, one thing I overlooked was to first make sure that the owners are motivated.

Even though their $300k loan has ballooned to $322k in less than 8 months (10.5% rate, 15yr fixed), the value of the land is still worth enough for the owners to refinance and get another loan to pay off their current loan. 

The owners have at least two law suits against them for lack of payment.  But with the new mortgage they took out, they should be able to pay off all the debt.  They did this once before in June 2005 to pay off their original mortgage of 200k and another loan for 15k.  But with the way they are going, they’ll probably default on their new higher balance loan in a few month.

I will keep tabs on this one, but I think that particular unit is a lost cause for now.

This past weekend, I swung by the pre-closure on inner-coastal Delray Beach again.  I met two of the neighbors and got some more information about the unit.  The unit’s owners actually also owe the co-op corporation fees for hurricane related deductible for fixing the roof.  In addition, they told me that the roof probably collapsed into the back bedroom and because it’s been a few months, it’s likely that the unit actually has mold damage.  The apartment also needs pest control.  All of this is bad news.  It’s looking increasing unlikely that this is a no-deal, but the next step I think is to talk to a realtor and get a good sense of what the market value would be if the unit were to be fixed up.  That will let me dig into the numbers and talk to subcontractors to get an estimate.  All of this will be difficult because the owners are still living there.  

I keep coming back to this pre-foreclosure rather than the other ones I have seen in the area or farther up north in Boynton because of the size of the unit.  By square feet, it is larger than some of the million dollar single family houses.  This co-op has got to go at some point because it’s sitting on prime real estate zoned for multi-units.  Time for more due diligence on this one.

With some more searching online, I found the contact info for the Trust company (the mortgagee of the co-op) of the inner coastal foreclosure that I have been looking at.  They actually have assigned an attorney to handle the foreclosure case now, but I wasn’t able to get him on the phone today.

Through the county clerk’s website, here’s the financial information that I found.  The owner had taken out a $200,000 mortgage to buy the house in 2002 and then in early 2005, they took out another $15,000 loan.  In June 2005, they cashed out and took out a $300,000 mortgage.  They paid off the $15,000 loan in Sept, 2005.  I am assuming that they had a large debt elsewhere to pay off because in Nov. 2005, they defaulted on their mortgage.  The owners defaulted on a $300,000 loan in less than 6 months after they took it out!!! 

The property does not have much equity in it, so there is not any urgency for the owners to salvage the property from going into foreclosure.  They have paid off (I am assuming) whatever else debt they had and now they will sit pretty and let the Trust foreclose on them and move somewhere else more affordable.  It looks like a no-deal here because there isn’t any equity to salvage.  I will find out more after I speak to the attorney.
 

The long awaited decision finally came yesterday.  I am talking about the site for Scripps Florida; the 100 acre site was finally picked after two years of planning.  The expected stimulus for housing prices in areas surrounding Boca Raton (i.e. Delray Beach where I live) will not come after all.  All the high paying scientists jobs as well as an influx of associated population (i.e. families, support personnel) to a small town of 50,000 people will be going to Jupiter, FL, instead of Boca Raton. 

Without this stimulus to the local housing market, I wonder how the prices could sustain… 

More reading here from the local newspaper 

http://www.sun-sentinel.com/news/sfl-scrippscoverage,0,5969743.storygallery