Posted on: November 23, 2021
WI 825 | Getting Out Of Preforeclosures


One of the biggest problems of homeowners is getting out of pre-foreclosure. When this occurs, there are many things you can do to help save them from this situation. Some of these may not make you money in the short term today, but you are staying in the conversation and you are beating out the competition because these are the things that the other competitors will never do. Wanna know?

Pace Morby, one of the most knowledgeable real estate experts, will discuss this often misunderstood area of real estate with our host, Brent Daniels. Pace will hammer out the basics of pre-foreclosure with an emphasis on what investors can do with home inventory that is located in this ever-growing industry and how to help homeowners out of pre-foreclosure and into a winning position to qualify for a loan or other types of help that will allow them to retain their homes and put it on sale.

Becoming The Ultimate Problem Solver – 8 Ways To Help Sellers Out Of Pre-foreclosure With Pace Morby

Episode Transcription

There are a lot of different ways that you can go in to best serve these people that are in pre-foreclosure. It depends. What you want to do is you want to remove all the other options or put them into one of those other options besides taking a cash offer. If it comes down to a cash offer, they’re going to stick with that deal, and they’re going to get that to close. The thing with pre-foreclosures is they’re getting mail, calls, texts and bombarded with a lot of different communications to help solve their problems.

Even when you lock up at one of these pre-foreclosures and it’s a solid deal, you don’t want it to get wiggly and fall apart. That’s why you have to put this effort upfront when it comes to pre-foreclosures because there are many different options getting thrown at them that you’ve got to secure it, you’ve got to put it in their mind that this is the best option. If it is the best option for them to get cash as his offer and then wholesale that, buy that property, put it into your rental portfolio, or fix and flip that.

A couple of things I want to be clear. This is something I wish I truly understood. I don’t even think I’ve been doing this a long time. Brent has been doing it longer than me, but I still don’t think I understood what I was even teaching until maybe two years ago. The thing I’m talking about specifically is our true job is solving a problem for somebody. If you don’t have a solution for them, there’s nothing I can do or say that will ethically make me money, therefore do not even try. I see a lot of people pushing on sellers, and then they come to me with the lead.

Here’s a great example, I talked about this challenge. Somebody goes, “I’ve got this lead. Will you talk to the seller from ago?” “I’d be happy to talk to the seller.” I get on the phone with the seller and he goes, “This is in foreclosure.” He’s on the phone with the seller and he’s like, “No, I’m just going to list the house with an agent. Why are the investors bothering me?” Is there anything I can do in that situation?

He’s made up his mind. You could say, “Who are you going to list it with? Do you need a referral? Can I help you out? What do you need here? Do you have somebody?”

I go, “Amazing. That’s great. You definitely should go that route, but who’s listing your house?” He goes, “I’ve got a friend.” I go, “Cardinal rule of selling your house is don’t ever have your friends do it because you’re going to have animosity.” This was the question I go, “Are you prepared to lose that friend?” He goes, “Why do you say that?” I go, “You’re going to lose that friend. They’re not going to sell it for what you want. They’re going to want to do an open house. You need to have a third party that gives you a reduced rate. My realtors give me a reduced listing rate. Let me introduce you.”

If you’re in the real estate agent business, listings are the gold. That’s how you leverage a lot of your time and effort.

The First Three Things

I introduced my student, Ingrid. On the call, Ingrid was on the live. She’s like, “I’m going to get a listing.” We referred Ingrid to the seller because I couldn’t help the seller, but I still kept that person in my world. For some weird, strange thing, something weird happens where they fall apart because there’s no equity, then the lead can come back to me. I’m not going to try and push somebody that they should list their property. Let’s go through a couple of these first three things. The first three things are things that you can do to help people that may not make you money in the short term today, but you are staying in the conversation. You are beating out the competition because these are the things that the other competitors will never do

Personal Loans

.Number one, personal loans or offering help. Pay attention, write this down, this is a great text message for a lot of people to understand. We will send a text message to people on the 2nd or 3rd follow-up if we haven’t gotten them to reply in a pre-foreclosure or foreclosure situation. The text message says, “We also have ways of helping you stay in your property, whether it’s a personal loan or other types of help. Would you be interested in a conversation?”

This is going to fry a lot of people’s brains because they’re like, “I’m starting and you guys keep telling me I don’t have to have any money to start wholesaling, and now you’re telling me I’ve got to get people personal loans.” What you’re going to do is you’re going to coach them. Because they weren’t replying to your first couple of text messages, you’re going to set an appointment for either a phone call or an in-person appointment. You’re then going to coach them on how they should go to their friends, family, or loved ones to get a personal loan to save their situation.

What happens in that conversation? “No, I can’t ask. Nobody in my family has money. We do give loans to people but here’s the challenge, it’s incredibly expensive and I have to get approval from my partner. Is that something you’d be interested in?” I’ve given one loan to one person, and it’s rare so don’t think that that’s the case.

The case is you’re going to coach them along, “Have you called your brother? Have you called your sister? Have you got called your parents? Have you asked for a personal loan to save you from the situation?” Here’s what those questions are going to do for you. It’s going to open the entire world of what’s going on underneath.

Realtor Relationship

If the seller has no major motivation, they have plenty of time, it’s at the beginning of the process, and they’ve got a ton of equity in the house is in good condition, the likelihood is ethically, you should push them to a realtor. If you look at number two, what you want to do is you want to have a realtor. Look at Jamil. He made $1.5 million on one realtor relationship. It’s why he has more cars than me. I drive a Prius and the guy has five cars.

WI 825 | Getting Out Of Preforeclosures

Getting Out Of Preforeclosures: The great thing if you list the property with your real estate agent, you have constant updates of what’s going on with that property.


He’s not getting that from referral fees from listing agents and blowing up and getting a ton of listings, but those listing agents that come across steel send those to Jamil because he’s now sending listing leads, which if you’re in the real estate agent business listings, that is the goal and is what you want. That’s how you leverage a lot of your time and efforts by having listings, not driving people around as buyers all the time.

The top best real estate agents around the country prefer listing. You’re giving them all of these listing opportunities. They’ve got connected to that whole person’s network and family and get referrals and build their business. It’s huge. When they come across those properties that naturally happen, they need some love and renovation. They have some clients that want to get rid of a property, that goes to Jamil. He makes $1.5 million. That’s the relationship that you have.

Just because you refer a pre-foreclosure over to a real estate agent and even if you get nothing from it, if you’re not licensed and you can’t legally get paid from it. Another reason may be to get a license or somebody on your team has a license and you’re not making anything on the upfront, the relationship, the squatting up, you are putting food in their bellies. You are putting income into the account of these listing agents and they’re going to bring it back to you in the form of a discounted property.

If you guys want to know how to get free Bitcoins, I’ll tell you how to get free Bitcoins. Here’s how you get free Bitcoins. Jamil made $1.5 million from one relationship because he has shown value to a real estate agent first. He went to the agent first and said, “I want to develop a relationship with you. I want to give you listing opportunities from people that are not a good fit for us.” He started that relationship. Year over year, Jamil makes the equivalent of twenty Bitcoins worth of cash from that one relationship. That’s how you invest in Bitcoin.

I get a lot of people who are like, “Are you investing in Bitcoin?” I’m saying, “I’m investing in relationships.” It’s the greatest thing ever. Jamil makes twenty Bitcoins a year from one relationship. He has other relationships, but that is why you give somebody a listing. You give people a listing because you’re a value provider to people other than yourself. You need to be a go-giver. Brent talks about this all the time.

The great thing is if they list the property with your real estate agent, you now have constant updates of what’s going on with that property. 20% to 30% of the time, it comes back to you anyway. You infiltrated with a Trojan horse into the relationship, an agent that can give you real-time feedback on what’s going on that property. It is a great hack to understand.

Investing in relationships is the greatest thing ever.

Loan Modifications

In real estate, what are we doing? We’re planting seeds and we’re filling our pipeline all the time. I want to have 15 or 20 deals in the pipeline that I’m constantly working on. One of those ways to do that is through realtor referrals. Number three, loan modifications. When I was starting doing foreclosures, they weren’t as easy as they are now. Loan modifications are easy.

Why do I want to do a loan modification? Doesn’t that keep somebody in their house? It can. If I do a loan modification, here’s what’s great in creative finance. I love creative finance because I can take a foreclosure. I can modify their loan, put all their debts and their arrears on the back of their loan, and I can take over a house subject to without any arrears. A lot of people go, “They’re in foreclosure $80,000.” We’ll do a loan modification, put the $80,000 on the back end of the loan, and now you’ve got to clean sub-to without any arrears. Brent, do you want to break that down?

Imagine that they haven’t made payments for a long time, you’ve got the extra fees, the penalties, the attorney fees, and they would have to pay $20,000 to be caught up with that loan. What the bank says is, “You owe $100,000. This property, what we can do is we can put this $120,000 and we can add it to your $100,000. We can space it out for your payments. You’ve been paying on this loan for about 5, 6 years. We’re going to reset that. We’re going to do another 30-year loan at $120,000. You’re paying the same, but does that help you out of your current situation? Are you okay now?” “Yes, I can make that payment.” “Can you prove that you can make that payment?” “Here are my W-2 stubs. Here’s my income. Here’s what’s in my bank account. Can you guys do this? Does this work?” “Yes, it does.”

These people are kicking the can down the road. Maybe COVID brought up a lot of these situations that required this because people were out of work. Unemployment checks weren’t as big as checks that they usually were getting, or their income that they were usually getting, some people were tight, or they took advantage of, “I don’t have to make payments for a while. Nobody is going to foreclose on me. This is awesome. I’ll redo this and figure it out later.” Now you’ve got a new loan on this property for $120,000, and they’re back to making those payments. That’s great. They can stay in the house, they got a new payment, but it does show you what was happening there, why were they in that situation.

Here’s what’s great about a loan modification. What happens a lot of times is you’ll talk to people in phase two that are like, “I’m doing a loan mod.” That’s great. If you guys understand how to handle loan modifications and what they’re all about, you will have so much power and so much ability and bring value to these sellers because they have no idea how to finalize their loan modification.

Here’s the thing, more than half of the people that apply for a loan modification get denied. What you want to do is you want to be involved when they’re doing a loan modification during their follow-up, “How’s the loan mod going?” They get rejected for a variety of reasons. The first reason why they get rejected has nothing to do with their ability to qualify for a loan mod. It’s because they didn’t finish the paperwork properly. Now we’re talking about a specific demographic of people here. The demographic are people that are maybe a little bit disorganized, have made some bad decisions in their life for one reason or another.

WI 825 | Getting Out Of Preforeclosures

Getting Out Of Preforeclosures: If you guys understand how to handle loan modifications and what they’re all about, you will have so much power and ability to bring value to these sellers.


They can be confused.

It could be like the lady on that seller call. Her husband might have been paying all the bills and handling the paperwork. When I asked her who her mortgage company was, she’s like, “I don’t know. My husband handles that.” What happens is when they go through a loan modification, there’s a high likelihood they don’t know how to complete it.

When you bring up, “Can I help you out? Are there any questions? You might have the loan mod.” You guys will have rapport-building opportunities to build with these people as they’re going through the loan mod. When 25 or 35 other investors are reaching out to these people during the ostrich phase, you’re the only person they’re listening to because you offered to help them with something that nobody else was offering to help them with. The conversation is, “It’s because I’m providing solutions that nobody else has offered them.”

We offer to help people find rentals. We do a lot of things. We come in there and we have conversations like, “Do you need another place to live?” What we do is we help them find a renter to come into the property. Have I ever helped somebody find a renter to come into this person’s property? No, but it continues the conversation and I give them good advice and say, “Have you ever thought about renting out your property and that way, that renter can make your mortgage payment for you?” Open up the conversation. I’ve never helped anybody on that.

Do you find that most of the people that you’re working with are owner-occupied?

95% to 98%.

This is different. If you guys are old school and you guys are used to the 2009, 2010, 2011 net whole crash, it was mostly rentals that were going through pre-foreclosure because investors got silly, overbought, and paid way too much and thought the market would always go up. The amount of the appreciation in most markets and debt paydown, most people have equity.

Your true job is solving a problem for somebody else. If you don’t have a solution for them, there’s nothing you can do or say that will ethically make you money.

Typically, when investors own their own property and they’re investing in other rentals, they’re a little bit savvier. They’re more interested in not getting the big things to their credit. They’ve got their house in a good position, but their rentals are beaten up or they’re not getting the rents that they want, or people stopped paying their rents.

All of a sudden, that’s when you’re going to see that those properties typically get listed on the market because they have equity and they get rid of it. That’s why we’re buying a lot of these as wholesalers. We’re approaching these tired landlords to find out that they want to get rid of these properties. How many times have we had conversations with people that are like, “I’ve got a tenant in there that’s not paying me, so if you want to give me a cash offer on this thing, I’m willing to listen all day long.” Those have equity.

What you’re looking at with a lot of these pre-foreclosures that get down the line, and they’re in the 1st and 3rd phase, is they’re typically owner-occupied. It’s a different thing. To put somebody down to say, “Maybe you can’t make the payment but if you put a renter in here, I can help you do that.” It doesn’t often happen because they don’t want to deal with that. They’re overwhelmed already. They’re not in that mindset of an investor. It is an option and it’s something to cross off the list.

It’s one of these things that if one of these other options for you guys has not opened the seller up to you, offering to help them find a renter or something along those lines to get into the property. I’ve never physically done that. I’ve seen other investors take what I teach and they’ve helped somebody find a renter. What happens with me is I know how to navigate the conversation and say, “Do you need help finding a renter?” They go, “No, I don’t need help with that.” “We do that for a lot of people or we have the ability to do that. Tell me why you wouldn’t want to have a renter.”

If you are interested in joining the most proactive group in real estate investing, it is the TTP Program, go to, scroll down, and check out the hundreds of testimonials. Check out what the program is about. If it feels good in your gut, then sign up for a call. I look forward to working with you personally.

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About Brent Daniels

Brent Daniels is a multi-million dollar wholesaler in Phoenix, Arizona… and the creator of “Talk To People” — a simple, low cost, and incredibly effective telephone marketing program…

Also known as “TTP”… it helps wholesalers do more, bigger, and more profitable deals by replacing traditional paid advertising (postcards, yellow letters, bandit signs, and PPC) with being proactive and taking action every single day!

Brent has personally coached over 1,000 wholesalers enrolled in his “Cold Calling Mastery” training, and helped 10,000’s of others who listen to him host the Wholesaling Inc. podcast, watch his YouTube channel, and attend his live events…

A natural leader, Brent combines his passion for helping others with his high energy, “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!

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