Bank Foreclosure

Properties

I am going to give you some of my secrets that I have learned over the years buying:

Bank Foreclosure Properties

Preforeclosure:

This when you approach the actual property owner and negotiate with them to buy the property.  It can be a great deal of work and also scary as you do not know the Property Owner and their state of mind.  When you deal with the owner direct you can sometimes get a great deal of information from them that will help you out if the property actually goes to sale.  You will want to know all about the liens that are on the property.  Usually when a person is behind on one loan there are other loans on the property also and they are usually behind on them also.  I have found it very good to go out and talk to the owner of the property before the sale as usually they will let you in the home and give you most of the financial information on the house.  They way I would approach the people is to see if they are looking for a loan to catch up on the back payments.  Usually this is not a option as most lenders would not want to loan any money to some one in foreclosure unless there is a large amount of equity.  Even if I was not going to loan them money I would still use this approach.  I would not be lying to them as if they had plenty of equity,  I could find a lender who would loan them money at a high rate and usually they would be willing to pay me a finders fee.  So my approach to them would be valid. 

First thing you want to look at is what is the condition of the home and see how much it would cost to repair.  This is the time to get all the information from the Owner that you can.  As as much as you would but do it in a way that it would what a lender would ask.  By you getting into the home you have a much bigger advantage at the sale over the other bidders as you know the condition of the home and what it needs in rrepair.  This can give you a $10-20K advantage or keep you from bidding and wasting money on a property that is trashed inside.

Second thing that you want to find out is what loans they have on the property.  This can be goldmind.  I have made $15K in a morning just off this knowledge, with out even buying the property.   You want to find out what IRS and State Tax liens as well as Utility Leans they may have as some of these will come in front of the the foreclosing lien.  I assume you want to know how I made the $15K in a morning.   Well I had  talked with the property owner and found out that there was second lien  on the property thur a local bank.  The first was foreclosing and second would get any funds above the first mortgage, depending on how high the bidding was going to go.  Well I was prepaired to pay about $20K above the first mortgage.  Since it has a second loan for $20K I approached them the morning of the foreclosure and found that they were not going to bid at the auction and just take what ever came to them after the sale.  Well I offered them $5K for their note on the property.  Knowing that I would be bidding up to at least $20K over the start bid. They accepted my offer.  Now I was the owner of the Second Lien on the property.  I went to the Foreclosure Auction and just keep bidding till the bidding was high enough to cover my Lien.   Once I stopped bidding I let the next person who bid on the property win the Foreclosure Auction.  I then gave a copy of my Lien to the Foreclosure Attorney, then waited a week and collected my check for $20K.  I made more  money that the buyer of the Foreclosure and had no risk.

For a few more Foreclosure Tips

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