Eleven notice of default names across four rural counties, and one of them is worth working through.

Let me make sure I have the vocabulary straight. A notice of default is the recorded filing that says the borrower's behind, and the auction is the later sale where the lender sells it off, and the pre-foreclosure window is the gap between those two? So hollow's four months is the whole window he has, and after that the owner has nothing. Is the window always four months or does that depend on where you are?

Juniper, it depends heavily on the state. Non-judicial states can be a few months, judicial states run a year or sometimes several. Hollow, before you write anything, drive all 11 in one afternoon. Half will be occupied and cared for, and at least one will be boarded up. Somewhere in between there will be a camper in the yard and three dogs. That's a free filter and it stops you from agonizing over the one house you happened to like the look of, which is a trap nearly everyone in this niche falls into at least once.

Mailing notice-of-default lists in a semi-rural county tends to produce conversations long before it produces a deal. Five months of mail with no closing and fourteen callbacks is a normal shape, and it means the mail is working. The letters that pull avoid the words foreclosure, default and behind. Four sentences is usually enough: the sender buys houses in that county, can close fast or slow, pays cash with no cleaning or repairs, and here is a cell number. Four touches spaced about twelve days apart is a workable cadence, and the calls tend to land on the second and third touch rather than the first.

I did the opposite of bramble and it went badly. I knocked, and when the guy opened the door I said something about "seeing that the bank filed," and he shut it. Six months of research and I blew it in nine words. Write your first sentence down and say it out loud in the car until it doesn't sound like a script, because you get one try per door.

Pike, that's the question I've never seen answered straight. What do you actually say when the door opens? Every version I write in my head either sounds like a robocall or like I'm pretending I don't know why I'm there, which is worse. Does anyone have language that a stranger doesn't hear as a trick?

Different worry. In a town of 2,800 with a 105 top end, the spread has to cover a two hour round trip, a title company that may take six weeks, and the fact that your resale buyer pool is maybe nine people. I stopped taking anything under about 60k of spread outside a metro because the work per deal doesn't scale down with the price. Hollow, your spread here is a lot smaller than 60 once you finish the arithmetic.

Basic thing I don't get. Does hollow have to pay off the 58,000 loan, or can he just take over the payments and catch up the 6,900? I keep seeing both mentioned and I can't tell if the second one is a real thing or a thing from a book.

Rigging, catching up the arrears without paying off the loan is a real mechanic in some deals but it leaves the loan in the seller's name and most notes have a clause about transfers, so that's a conversation for an attorney in that state before you ever say it to an owner.

Hollow, on the letter. My parents got about 30 of these in 2011. The ones that went in the trash unopened had a fake handwriting font and a yellow sticky note printed on them. The one they kept was a plain typed page from a guy with a local area code who said he'd been by the house and would come back if they wanted to talk. It was the local number that did it.

Before anything gets priced, the question is what else is attached to the property. Unpaid property taxes, a second mortgage, a hospital judgment, a contractor's lien. All of those come off the top ahead of the owner, and on a 105k house with a 58k first there is very little room before the owner's share reaches zero. Title practice and what gets recorded varies by state, so it is worth asking a local title company what a preliminary search costs there and buying one before the file picks up any emotional weight.

Worth naming plainly that this is a job rather than an investment. Eleven names, a two hour drive, door knocking, chasing servicers. That is work, and it can be good work. If what you want is a check that arrives while you are doing something else, this is not the aisle.

Worth checking whether that 1,100 feet is actually one unit. Plenty of older houses in small towns get split into an up and a down at some point, with a second meter added, and the assessor's record is never updated. If it's two units at roughly 500 a side, the rent number changes and so does the buyer pool. Cheap to check, just count the meters on a drive by.

A third of an acre in a small town almost certainly means well or septic, or both. A failed septic runs 12 to 25 thousand depending on soil and county rules, and some states won't allow transfer without an inspection or a permit update, which also varies by state. That line item is what turns a 20 thousand budget into 40. A call to the county health department usually answers what a transfer requires there, at no cost.

700 a month against 105 of value is a rent ratio worth walking away from, and that is before accounting for a 1962 house's repair pattern. Operators holding several properties in that band know the maintenance does not care that the rent is small. If the plan is to rent it, price the deal like a rental and check whether the number needed to offer leaves the owner anything at all.

And in a town of 2,800 your applicant pool for that rental is thin enough that you'll be choosing between two people, one of whom you'll have doubts about. That's how people end up with a bad tenant in a cheap house.

The 6,900 on the filing is a snapshot and it grows. By the time closing happens, the servicer's payoff will include more interest plus attorney and trustee fees plus any inspection or insurance they force placed, and it is routinely thousands over what the owner thinks. That number cannot be pulled independently either. The owner has to sign a third party authorization and the servicer has to accept it, then a written payoff comes back good through a specific date. Get the number in writing from the servicer and do not quote the owner anything before then.

Have you looked at who owns the parcels on either side? In small towns the neighbor is often the most motivated buyer for a tired house on a third of an acre, especially if they want the lot. Doesn't fix the spread math but it answers keystone's question about who your buyer is.

Read the notice itself line by line rather than relying on a tool's summary. The tool's auction date field is often the first scheduled date, and postponements are routine, so four months could mean four months or it could mean eleven. Separately, some states have a statute specifically covering purchases of homes in default from the homeowner, with a required contract form, mandatory disclosures and a cancellation right, and a few of them treat a violation harshly. Whether that applies to a given county is a question for an attorney licensed there, and it is a worthwhile hundred dollar conversation to have once before contracting with an elderly owner in that position.

Slightly sideways idea. If the numbers don't leave room for you to buy, the owner might still be better off listing it at 105 and paying off the 58 plus arrears at closing, and there's a version where you're the person who introduces them to an agent. Whether you can be paid anything for that introduction depends on licensing rules in your state, and those rules differ a lot, so check before you assume a referral fee is available.

Here's the arithmetic worth writing down. Call the value 105 for a moment. Repairs 20. Selling costs at 8 percent of 105 is 8.4. If a flipper wants 15 for the risk, the ceiling on what anyone pays the owner is about 61.6. The first is 58 and the arrears are 6.9 and climbing, so the payoff alone is 64.9 plus closing costs. That's already 4,000 underwater before the owner sees a dollar, and that's with an optimistic repair number and the septic still unknown. The deal doesn't work at 105. It works at 125, or it works at a repair number under 10, and neither is established yet. Get an interior look and a written payoff, because right now every number in play is a guess stacked on a guess.

Sextant's math is the whole thread. The one number holding this deal up is a 105 pulled from the street in a market where sale prices may not even be public depending on the state. Find three real closed comps first. If three can't be found, that's the answer about this county.