Today I received an email with questions and concerns about the sale of the mortgaged property. Great questions, so I decided to post both the question and my answer below.
What is your experience with foreclosures?
I have a question for you, I am not new to real estate investing, but I am new to the foreclosure auction …
there is a property to be auctioned next month in our courthouse.
I have applied to pre-qualify for a standard bank lender that will not close until after appraisal repairs are made.
I turned to a private lender who will not give a loan until he finds out about the repair …
BUT I CAN’T GET INTO THE HOUSE!
I must make my bet invisible! How can I get funding? I can place a bid and pay a deposit, but I cannot get out of my pocket for repairs, etc.
Also, how can I evict people if I do not own the house, if I win the tender and cannot evaluate the repairs until they are out of order, how can I evict them if I have not closed the funding and I cannot get funding until won’t receive them and assess the repairs? again and again…
Any advice would be helpful. Typically, you must have 6 figures in cash to play in these auctions …
Over the years, all homes and all the investors I know buying foreclosures at a foreclosure auction is one of the worst ways to buy. There are a number of reasons, including the ones you mentioned:
- You cannot enter the house to assess what needs to be done because the bank does not yet own it.
- You have to work with the bank (worst) and the rules are constantly changing and never in your favor.
- Don’t buy anything with a renter if you can avoid it. When a home is foreclosed, the owners are usually furious and want to take it ashore, so they often destroy property. Ultimately, this will not harm the bank, but only the buyer. We bought one where foreclosure owners poured sand into all the drains. It is impossible to know this in advance.
- Default periods
- Most foreclosed properties are sold at retail at auction.
- By the time they get to the auction, good ones have already been selected.
- There is a very real reason why banks are reluctant to lend you a loan to buy these …
So, I advise you to attend all meetings with local investors where you can find properties to buy in more profitable ways than these auctions. If the house is worth a decent price in a decent area, we find that end-customers are offering them retail prices anyway. And, once your bid is approved, there will be a 10 day rollover period where anyone else can come in and place a higher bid.
Buyback auctions are not good. How to make them? Do not. It is much better to let him buy the property and then buy from the listed real estate agent as soon as you can get through it.
What can you add? What is your experience with foreclosures?#alienated #Property #Purchase