1. Go to the Courthouse and obtain a list of homes with Homestead Exemptions Sold on the Courthouse Steps in the last two years, including Address, Price, and the Buyers Name & Telephone Number, as well as the Former Owner's Name, Address and Telephone Number (or use the Internet to locate these people).
1.1 On all these properties, determine if a Quit Claim Deed has been filed by the former owner in favor of the Courthouse Step Buyer. If so, then move on to the next property on your list.
2. Contact the Buyer and obtain his Total Cash Investments on the home.
3. Calculate the Courthouse Steps price plus 25% of the total, if the current date is less than 12 months from the sale date . Calculate the Courthouse Steps price plus 50% of the total, if the current date is greater than 12 months from the sale date. Move forward on your list if the date range is greater than 12 months.
4. USE the RDI database to obtain an AVM (Value Analysis) of the property.
5. If the typical Courthouse Steps price is 20-30% of the RDI Market Value and the Buyers' cash outlay plus 25% of the total is less than 50% of the RDI Market Value then contact the Original Owner. ("Contact the Original Owner" is a skill in itself).
5.1 In most cases, due to the Redemption laws on Homestead Property, a Courthouse Steps Purchaser will do anything to find the Former Owner and obtain a Quit Claim Deed. Then the Courthouse Steps Owner can safely protect any improvements made on the property for either sale or rental purposes.
5.1.2 If you find, after researching the County Clerk Records, that no Quit Claim Deed has been filed, utilize any of the various methods and data sources available to contact the Former Owner. There are searches such as Address-Forwarding from the Post Office, Forwarded Magazine Subscriptions, Internet People Locators, etc. (Yes, the Courthouse Steps Purchaser will also be using these methods if he/she is astute). Since only the Original Owner can recapture the home, locating them is critical.
6. Offer to give the Former Owner $1,000 of the Must Sell Price Courthouse Step Buyer price) but exclude any Cash or Material improvements made since the purchase after they Recapture the home. (This is Found Money for a few Former Owner signatures).
7. Put up or Finance From a Lender a purchase of the home for
A) The Recapture Sale Price (from #5 above)
B) The Sale from A to you at the time of the closing of A.
8. What have you achieved with this Secondary Market Method as opposed to the "Courthouse Steps" approach?
a) The Courthouse Steps Owner "Sweat Equity" and all other improvements are Your Profit .
b) You have avoided the time-consuming Courthouse Steps method plus the two year risks.
c) You have a fully improved and Current Market Value Home which can be immediately re-financed for additional cash to continue onward.
d) You have avoided the downfall of most First Time Investors on the Courthouse Steps who must turn the property into a Rental, and to be "Rentable", the Investor must put his own money into improvements, appliances, etc.
e) These "new" Investors bank that in 99.9% of the cases the Former Owner will not recapture the property. Use this risk to your own advantage.
9. Obviously the Courthouse Steps Buyer will be a Reluctant Seller . They have no option, however, if the Original Owner wishes to Recapture the home.
10. The Previous Owner will be motivated to Recapture the home by the Found Money.
11. Your time spent on a few telephone calls and attending a closing net you a Profit, and Maximize your Time, Dollars and Return.
