Posted by JC in Seattle on June 30, 2003 at 19:45:02:
Thanks
Source of cash for auction - Posted by JC in Seattle
Posted by JC in Seattle on June 30, 2003 at 13:06:12:
Worked up my courage & went to knock on the door of an owner whose house goes to auction in about 10 days. She told me to get lost.
The house is really beautiful. ARV is 350K. She has a first + arrears of 111K. Second is 75K.
I would like to bid on this at auction. Any recommendations on a source of cash? Do hard money lenders put money up for someone to take to auction? Seems pretty risky for them. I was thinking of looking for a partner with cash, but wasn’t sure how I could structure it. Thanks!
Bet ya a Hot Fudge Sundae… - Posted by JT-IN
Posted by JT-IN on July 01, 2003 at 01:14:38:
That it doesn’t go to sale in 10 days…
Owners like this one usually end up utilizing one or more of the time management devices to forestall any pending sale. Usually these options run out, so you may want to stay in light touch with the owner, if the property is that good.
The most widely used time management stall device is to file for a BK just before the sale… There are others that can be used effectively too, and if an owner is vigilent they can stall and stall, which will delay a sale for sometimes a year or more… The record that I have seem is a property that just sold about 6 months ago… around 1/03, and the foreclosure was filed in 1996… That is what I call a four corner game, using a basketball analogy.
You have sitting within 50 or 100 miles of you, one of the best foreclosure investors in the Country… barr none. This of course is Joe Kaiser. If you make any headway on this or another deal like it, my advice would be to bring in the 800 lb Gorilla right off the bat, and watch Joe slay the Dragon… You will learn lots, and certainly profit in a portion of the deal… Like the old saying goes, a portion of SOMETHING is sweeter than 100% of NOTHING…
Wishing you successful eduation in the foreclosure game…
Just the way that I view things…
JT-IN
Re: Source of cash for auction - Posted by Brent_IL
Posted by Brent_IL on June 30, 2003 at 13:34:26:
You didn’t mention the cost of repairs, but the LTV is low. At the auction, the price will probably be bid up. It seems unlikely that the first or second will deal. Most HM lenders will want to have an ongoing relationship with you before they’ll give you money to bid. They manage the risk by using an endorsement with qualifications.
Re: Bet ya a Hot Fudge Sundae… - Posted by JC in Seattle
Posted by JC in Seattle on July 01, 2003 at 13:36:24:
A sundae it is. I would hope this owner has the sense not to let $170K equity vanish into thin air. As far as keeping in light touch with her, she barked at me and called me an ‘ambulance chaser’ when I showed up at her door. So, I’m a little hestitant to go back. I did send her a note. I was planning to call the trustee the day before to see if the sale is slated to proceed.
Good advice regarding the 800 pound gorilla. I’m guilty of trying to do too much on my own. Might explain my sum total REI income of $0.00. -Thanks!
Re: Source of cash for auction - Posted by JC in Seattle
Posted by JC in Seattle on June 30, 2003 at 14:00:11:
Hi. I haven’t seen inside so don’t really have an idea on repairs. I agree that it will probably get bid up to cover 100% of both liens. Seems like I could still pay into the low 200’s and get a heck of a bargain. But, I haven’t established a relationship with a hard money lender, so probably couldn’t get money that way. This would be my first deal. I’m seeing a number of posts here that say I should probably stay away from auctions until I get more experience, so I am re-thinking this one. Thanks for the response!
Re: Bet ya a Hot Fudge Sundae… - Posted by JT-IN
Posted by JT-IN on July 14, 2003 at 20:54:04:
JC:
I suppose we shoould now know who won the Hot Fudge Sundae… Did the house go to sale, or not…?
Oh, the logistics of sending a Sundae 2000 miles…
JT-IN
Re: Source of cash for auction - Posted by IB (NJ)
Posted by IB (NJ) on June 30, 2003 at 18:59:42:
Of the 3 main types of foreclosure investing (preforeclosures, sheriff sales or auctions, and REO’s) auctions are by far the riskiest. I agree that you should re-think your plan.