Attended foreclosure auction (long) - Posted by TomC (Md)

import · February 15, 2000, 11:55am

Posted by Larry on February 16, 2000 at 04:10:01:

I recently bought a forclosure at auction at a really below market price and it also had a renter. I paid cash for the property and then refinanced at 70% LVR and pulled my cash back out. Anyway, the renters agreed to a L/O with $1000 down and slightly increased rent payents. I never touched the prop. What made this whole thing work is that here in OHIO we have a process called something like Writ of Possession that would have given me quick possession through the Sheriffs dept since I bought it thru a foreclosure. I guess all states are different. Bottom line: if the renters would have been uncooperative then I could have gotten them out quicker than evicting. Hope this helps. Larry

import · February 15, 2000, 11:55am

Posted by TomC (Md) on February 15, 2000 at 12:55:20:

Just thought I would share…

I went to my first foreclosure auction this morning. I was going to the courthouse anyways to file a failure to pay rent notice (first step in eviction here, and it usually gets the tenant back in line).I had found a property on an auctioneer’s website that was 6 houses down the street from another house I own, so I know the neighborhood well. I figured I could both bid on the property and file my papers in one trip.

I would estimate FMV to be $150 in the current condition, needing $25k to bring it into first class condition (and FMV would then be $175K easily).

What bothered me was when I drove by the house this week, I could tell that it was still occupied. Being a landlord already, I immediately think about the problems of getting the current inhabitants out of the house! That can take 60+ days in Montgomery County, MD.

I stopped by the bank and picked up a cashier’s check for the $2500 min deposit, and headed to the courthouse. There were about 15-20 people there for the auction that was held outside on the front steps. The auctioneer read the terms of sale, and then asked if there were any questions. One potential bidder asked if there were any tax liens, to which the auctioneer deferred to a guy that must have represented the bank. He said no.

The bidding started low, and quickly ran to $70K. I was willing to go to $95-$100K (I would have gome a little higher if the prop were vacant), but that was passed pretty fast, too. Even though I was out of the running, I wanted to see how it ended. The final sales price was $131K!! I’m convinced that they paid way too much to be an investor, but probably OK if they were buying it for their own principal residence…there just didn’t seem to be enough profit margin for rehabbing or flipping.

Oh well…just as well I guess, since I need to finish the rehab on my old house to get it ready for sale in about 3-4 weeks…I wouldn’t have the time for another project just yet unless it was a steal.

In case you are interested, here are some links on how I found this. First, the auctioneer’s web site:
http://www.alexcooper.com/realEstateAuctionsMain.html

They list the auctions about 2 weeks before the actual sale date, so maybe this would be a good tool for “pre-foreclosure” deals.

The State of MD’s tax assesor’s web site:
http://www.dat.state.md.us/sdat/CICS/

Pictures of the house I am re-habbing:
http://www.relitech.com/tomc/house

Happy investing,
TomC