Foreclosure University

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Buying Distressed Properties For Pennies

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Buying Distressed Properties For Pennies

A few days ago, I sent an email out regarding buying distressed properties.  I wanted to show you a quick glimpse of some of the deals we are seeing and doing.  I show you these numbers not to brag, but so you can see what kind of opportunity is out there in the marketplace.  And you’ll see that you don’t have to have a lot of money to turn a quick profit and quadruple your investment.

Over the past 2 years, we’ve been using this strategy to buy and sell distressed properties.  We’ve bought and sold over 500 properties this way and with what we are seeing, there are no signs of slowing down any time soon.

Here are some of the properties we’ve sold recently… [Read more…] about Buying Distressed Properties For Pennies

Buying Properties At The Auction

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Buying Properties At Auction – Watch Out!

Buying Properties At AuctionQuestion:  We were buying properties at the auction. The loans that we are aware of are:
First $70,000. (this was a personal loan that we think got satisfied)
Second $350,000. Wachovia
Third $124,700. Wachovia
A Judgement too! We think it started out at $463,000. and ended at $137,000, We’re not sure about this number.

But we paid $137,000 at auction all cash, cashiers check, we’re idiots!!!
Can we get this rescinded????
HELP, I’m begging you with everything we are, we lost $137,000 cash, our life savings. We were ‘robbed’. We live in Los Angeles, and less than a week ago, we bought a Palm Desert house at a “home foreclosure auction” at the Riverside Court House. But we found out a few days later, we didn’t buy THE HOUSE, we bought the 2nd loan, or the 3rd loan? What… how can this happen? How is it even legal to sell debt at a courthouse!!!! [Read more…] about Buying Properties At The Auction

Postponed Auction – How do we push it through?

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Question:  The previous owners have fully given up on their house and now we are interested in buying the home from an investor who has the right to the house after the auction.
The auction was set for 4/7/09 and was postponed by the special master. Our realtor said there was some paperwork missing from the mortgage company.

It has been 2 months and there is no movement on the court case and no new date has been scheduled.

Is there a way we can try to push the auction through faster- write a letter to the judge or contact the special master?
Should we contact a lawyer to do the work?

Please advise-
Long awaiting in New Mexico.

 

Answer:  

We are hearing about more and more of these situations as foreclosures continue to mount. It is a new strategy used by homeowners to postpone and sometimes even eliminate foreclosure or force the mortgage company to “modify the loan”. What homeowners are doing is asking the lenders to produce the original loan documents and they can’t. If they can’t produce the right documents, they can’t foreclose. And until they locate the right documents, there is nothing they or you can do. Not saying this is what is happening, but could be. They could of also had a “short sale” offer which can also postpone the auction. Or the homeowners could have filed bankruptcy which can also postpone the auction.

Private investor holding a lien, how do we foreclose?

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Question:  We are the mortgagee of a property in Michigan though we live in another state. The mortgagor who in turn is renting the house to somebody has stop paying us. We are in the process of foreclosing the house. My questions are:

1) In the Mortgage contract, it states that “we, the mortgagee have the right to foreclose the property just by posting an advertisement on the newspaper”. I do see in your Michigan Foreclosure Law that, we need to include a Power of Sale which permits the property to be sold by public auction. Do we have a right to just foreclose the property but NOT sell it to the public via auction since it will be sold for so much less? We are planning to sell the property thru a real estate broker after the foreclosure. Or is the Public Auction Sale Mandatory if the foreclosure is only thru advertisement?

2) Can we as the mortgagee purchase insurance for this property? We’re worried what if something happens to the house then we’d totally be zeroed out. I’ve ask State Farm and was informed that since we do not live in Michigan, we cannot purchase insurance. Can you please suggest where we can purchase Mortgagee insurance. I know banks are able to do this but for us individual investors, what are our recourse? Can you name some company around Michigan state?

3) What happens if the mortgagor files for bankruptcy, can we still get our property back since we are the only mortgagor and since he is not using this property as his primary residence but is renting it out?

ANY HELP/ADVISE WILL BE GREATLY APPRECIATED. THANKS!

Answer:

  1. Yes you can foreclose on this property and if someone actually bids, they will pay full price for the home.  If no one bids, like you are assuming, then you take back the property in which you already own.  It might be easier if you can just get him to “deed” the property over to you so you can avoid the whole foreclosure process, which is very time consuming.  Then he can avoid “foreclosure” on his credit report as well.  It would be a win for him… and you I guess in way because now you can list the home faster.
  2. This is something you’ll have to research more in your local area.  Most banks require homeowners to have insurance in the event of a catastrophe so they can rebuild the home.  So it can be done.  This is your asset, you need to protect it just like anything else of value…
  3. If he files bankruptcy, then he will either keep the home and continue his payments to you or list the home in the bk and the home goes back to you.  Again, if you can get him to just deed it back to you “deed in lieu” it will save everyone a lot of time, headache and money.  Then everyone can get on with their lives.

Land Contract-Seller Not Paying Bank-Foreclosure Letter on Door

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Question:  We purchased an extremely run down (non livable) house last November on land contract. We had the land contract drawn up by a real estate lawyer, added our name to register of deeds, etc.

After 9 mos of my husband and I renovating the home to livable conditions, we moved in 3 months ago. We invested over $25,000 into this home during the 9 mos renovation period.

This week we came home and found a bank foreclosure letter on the door in the name of the person we purchased from with an auction date in less than 1 month.

Do we, as the land contract owners, have any higher priority in purchasing this home when it goes up for auction? Does anyone know if there is anything that can be done?

 

Answer: 

Hi: Sorry to hear of your troubles. First and foremost, no, you don’t have any more priority at the auction then the next guy… in fact the auction can be like the mob if you’re careful.  It’s not place to mess around if you’ve never done it before.  What you can do if you have not filed a lien on the property at the county, you might consider that. It will cloud the title and hopefully stall anyone from getting clear title placing a bid in front of you(You will want to document the repairs as well with photos- before and after- and receipts for repairs/renovations).

Get in touch if you haven’t with the lender and make a direct cash purchase OR do a refi NOT a purchase. If there are seasoning issues with the current land contract -ask for an exception based on the current craziness. With equity in the property and decent credit the lender would be crazy to let this property to go to sheriff sale in the current market especially if your land contract is for a purchase price higher than the old payoff of current mortgage now in foreclosure- that could be your leverage.  Consult a real estate attorney for specifics on law. If you need a possible hard money lender to help you close the deal, feel free to contact me.(There might be a short sale opportunity here as well- but that might be throwing more mud on the wall)….

Lesson in Title Search For Foreclosure Properties

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Here are some Lessons I learned in Title Search For Foreclosure Properties

I can understand that when looking at foreclosure auction prices, most of the properties look like a bargain. You have to understand where the auction price came from, before getting too excited about it.

Let’s first understand how the property happened to be in foreclosure. A common reason is that current owners did not pay their mortgage or tax bills on-time, causing bank or municipal/state/federal government to place a lien against the property, in other words, the mortgage lender or government wants to get payment on the current owner’s obligations by any means, even if they have to go through the foreclosure expense and auction the house to recover the owed amount or gain possession of the house to sell it latest via real estate agency (REO properties).

If the current property owner had a single lender, then the amount you see at the foreclosure auction might be the only debt against this property (key word is might). In the case where the current owner had, say, a home equity loan in addition to home mortgage(s), there may be two or more liens against the property from different mortgage lenders. Whichever lender files “notice of default” first and puts a lien against the property gets to foreclose on the property first. The payout from foreclosure action to lenders or government always happens in order of court filing. The only way for you, as an investor, to find out what liens, mortgages, debts exist against the property is to order a Title search.

Foreclosure auctions (sometimes called sheriff’s sale) are typically held in the municipal (county) courts. The County does not offer you any protection against additional liens on the property, nor do they guarantee you a clean title. Lenders or government agencies are always represented by top notch real estate lawyers, which do not care about your interests and are only interested in selling the property at the auction.

Enjoy!