Posted by John J. on May 09, 1999 at 24:28:38:
Susan,
When you show up at the Trustee Sale, you generally need to show that you have certified funds with you for a deposit ($5,000 or whatever the Trustee decides). When you are the successful bidder, you give the deposit to the Trustee or his attorney/representative. You will forfeit this if you don’t show up with the remainder of the purchase price within a specified timeframe, such as 24 hours. I usually bring a cashier’s check made out to “Bearer” to the sale. This is equivalent to bringing cash. If the advertisement for the sale does not specify the amount of the deposit then you can call the Trustee’s office and ask.
Many areas have realtors or others who will do all the leg work. I work with a realtor who does this full time and works with many investors. He will fax me a list of all the properties that come for sale the following week that match my criteria (no dirty title, initial (bank’s) bid less than 60% of market value minus fixup and reselling expenses). He charges me a fee of $1,500 whenever I am the successful bidder. You can find these folks by attending sales and asking others who attend or going to the county recorders office and talking to the people who are doing title research.
One of the reasons that houses sell so cheap at the trustee sales is that there are so few people who qualify as buyers - i.e.: have enough cash laying around to buy at the spur of the moment. If the credit lines on your credit cards add up to enough then you can take out cash advances. I’d shop around for home equity lines of credit.
Some of these houses need a lot of work. Often you won’t be able to see the inside and there is no buying ‘subject to inside inspection’. You will have to allow for expenses after the sale, which might include evicting the previous owners. Just don’t go in over your head.
Another option is to find a private investor to work with for a spit of the profit. You might set up a partnership or LLC beforehand to spell out the terms.
Good luck. This is an ideal time of your life to be able to do this, if you can work it out financially.
John J.