First Foreclosure Auction - Posted by Connie

Posted by Ronald * Starr(in No CA) on September 05, 2003 at 01:03:22:

Bill Taylor--------------

It is nice to have an active foreclosure investor say the same sorts of things I say about the risks of being a foreclosure investor. It may cause the beginning investors to take more seriously my cautions about getting involved with foreclosure auctions, as I put forth in my article “Is foreclosure investing for you” in the money-making ideas forum of this CREONLINE.COM website.

Boy, 30-40 deals a year. That is a lot. I’m curious where you are operating. Could you give the original poster some idea of the buying price to market value you operate with?

Good Investing and Good EducatingRon Starr**

First Foreclosure Auction - Posted by Connie

Posted by Connie on September 04, 2003 at 12:36:52:

I went to my first foreclosure auction today, just to see how they work and who participates. The one home scheduled for today was posponed, but I did have a nice chat with the county treasurer. It seems that in my area, hardly anyone participates in these. She said 9 times out of 10 noone is there. The lender submits their bid by mail and they get the property. From what I have read on this post and others like it, isn’t this unheard of? Aren’t there usually investors clamoring for these properties. What am I missing here? I sounds like all I would need to do is alot of research on the property, liens, bankruptcy, judgements, etc… and if it is the first mortgage foreclosing, no other debts, all I would need to do is bid $1 over what the lender is bidding. They won’t even be there to submit another bid. This sounds too easy, I must be missing something. Any comments? Or does this sound like an untapped market in my area?

Re: First Foreclosure Auction - Posted by Marcos

Posted by Marcos on September 04, 2003 at 14:38:23:

I’m going to disagree slightly with Mr Starr. There may be plenty of other reasons why people don’t show up.

  1. If you live in a rural area, many times these markets aren’t nearly as active. I have been to smaller county sales, and noone is there. There are actually no investors who buy at the sale there. With only 10 or so sales a month, I guess it wasn’t worth it for anyone to figure out how to track these sales.

  2. You may be in a funky area, where the sale is mostly irrelevant. For instance Alabama, where there is a 12 month redemption period. Most of the time, properties don’t sell at the sale, and people make the deal in redemption. There are a few states with these sort of sales. Mostly states with funky redemption laws.

HTH,

Marcos

95% not worth bidding upon - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 04, 2003 at 12:51:27:

Connie------------

9 out of 10 times nobody shows up? Sure sounds right to me.

What you are missing is that 95% of the properties that go to foreclosure auction are not worth bidding on.

The loan is two years old, was 90% LTV when put on, the payment has not been made for 8 months, the opening bid ia 106% of fair market value.

I don’t recommend foreclosure auction buying for beginners. I recommend you read my article on the topic “Is foreclosure investing for you?” in the money-making tips forum of this CREONLINE.COM website.

Good Investing***********Ron Starr*************

Re: First Foreclosure Auction - Posted by Bill Taylor

Posted by Bill Taylor on September 05, 2003 at 06:59:52:

Oh one more thing in my area there is no redemption and you do have to have the money within 1 to 2 hours after the sale so this does eliminate a few buyers. We have bought deals after the slae when some chicken-sh-- got cold feet. I love those guys.

Re: 95% not worth bidding upon - Posted by christy

Posted by christy on September 05, 2003 at 08:04:29:

Can you provide a link to your article on the topic “Is foreclosure investing for you?” in the money-making tips forum of this CREONLINE.COM website? I can’t seem to find it. Thanks, Christy

Foreclosures in my area! - Posted by Bill Taylor

Posted by Bill Taylor on September 05, 2003 at 06:57:15:

We invest in Indiana and since we are number #1 in foreclousres in the country there are some deals to be had, not without risk of course. We are buying sometimes in the 60 cents on the dollar range or less sometimes. The homes we buy range from $10000 to about 180000. WE don;t buy much at the top end but we buy only when there are significant discounts to value. The value is something that homeowners pay definitely not my value. WE will sell homes at retail value but takes quite a while to get in most cases. WE do l/o on them and at times this is not even quick. WE make our money slower than in other parts of the country but it still spends.

Just went to a foreclosure sale… - Posted by David Krulac

Posted by David Krulac on September 04, 2003 at 15:56:19:

most if not all the properties are over encumbered with mortgages, interest, penalties, taxes and attorney fees up to and exceeding the value of the property.

Most if not all of the properties need some work, and possibly major work. If a person is losing their home they are not going to be cleaning, painting, updating and maintaining their property. Some owners vandalize the property taking everything that is not nailed down and many things that are nailed down. I have seen personally the following items removed from foreclosed houses:

toilet
kitchen sink
builtin appliances
wood flooring
light switches
light fixtures
suspended ceilings
doors
medicine cabinet
trees and landscaping

in addition there are often broken windows, holes in walls, dog/cat/??? odors, urine and excrement.

At the sale yesterday there were 77 properties on the sale list 5 were sold NOT to the foreclosing lender.
That’s a lot at the last 2 such sales only one property was sold to a NON-lender. Of the 5 one was a very good buy, one was average, and the other 3 were market price for a property not in market condition.

Been there done that.

David Krulac

Not bidding-just studying - Posted by Connie

Posted by Connie on September 04, 2003 at 13:03:40:

I’m not planning on bidding anytime in the near future, just studying the market. I realize if there is not any equity in the property, it is not worth bidding on. So, if a property came up for auction with-say 20% equity, then there would be plenty of bidders? I am just studying and tracking all these for now for my “homework”. Don’t worry, I am not going to jump right in and start bidding. I realize I have alot to learn first. But I plan on it someday.

Re: 95% not worth bidding upon - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 05, 2003 at 10:52:49:

Christy---------------

Click “money ideas” in the upper left corner of the page. Count down to number 7 title.

Good InvestingRon Starr***

Re: Just went to a foreclosure sale… - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 04, 2003 at 16:29:00:

David Krulac–(PA)------------

Yep. Not all foreclosures are a good deal. In fact, I think fewer than 8% are.

Let’s add the kitchen cabinets are gone as well as the woodwork and windows around the front door gone with the door. Also, the wood stove–and those can be heavy.

So far I have not seen a foreclosure where the former owners took away the brick fireplace. Maybe the next one?

Good InvestingRon Starr*

Re: Not bidding-just studying - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 04, 2003 at 14:04:44:

Connie-----------------

Good for you doing your homework before you starting working to get homes.

Bids at 80% of market value and people bidding? Not likely. Foreclosures are very risky. Good professionals usually won’t bid as high as 80% of market value for properties. At least here in Coastal CA, where I am.

Most professional foreclsoure investors are looking to buy at under 75% of market value. If they see deals at 60% and 65%, then they get excited and active.

Good InvestingRon Starr

Re: Just went to a foreclosure sale… - Posted by Bill Taylor

Posted by Bill Taylor on September 05, 2003 at 24:07:22:

This is very very rare but I bouhgt one a couple of years ago that the people must have cleaned the crpets on the way out and they left me the garage door openers. Looked like they put in a new furnace and c/a and new cabinets shortly before they left. This of course is not the norm. We have bought 30-40 of these a year and for the most part do not buy then where we have to do that much to them. The number of about 5-8% of them being good deals is definitely true. We are not looking to buy all of them just those very profitable morsels that we can make heaps of money on. You better know what you are doing though there are some crevises you can fall into that you may never find your way out of for beginners.

Re: Just went to a foreclosure sale… - Posted by Tarheel T

Posted by Tarheel T on September 04, 2003 at 22:32:23:

I got one a while back with the whole circuit breaker panel ripped out of the wall. Sheet rock shards left hanging as evidence!!

Gotta hear this - Posted by Michelle

Posted by Michelle on September 04, 2003 at 14:25:09:

My boss use to drag me to the auctions with her from time to time. Well the one time I attended this auction with her, there was a bidding war over this one property. Apparently the property owner decided to try and out bid the lender on his property.(it’ll never happen). Well they went back and forth for about a half hour before the property owner realized he wasn’t bidding on his house, but someone else’s house down the street from his, owned by the same lender. He finally did out bid the lender before he realized this. I’m not sure what happended after the council, and everybody in the room laughed their a*sses off but it made for a good laugh for all the potential investors out there.