If have a buyer in place, can this work? Will there be any seasoning issues?
SF Bay Area, CA
the issue with funds for trustee sales and why its dominated by a relative handful of investors ... is you need cash to bid.. transactional lender will not do these as they are not going to let you walk out of their office with a check for 500k.. transactional lenders only put money into Escrow accounts.
you need a true money partner if you want to partake in the court house steps game.
There are few HML in the PDX and Seattle market that will provide checks to bid they actually bid for you.. but you have to make a 20% deposit in cash before they will bid for you... they then take a security interest in the Trustee receipt and when the deed comes they roll you into a HML... And since you already put your 20% down that is your skin. and then you pay rehab out of pocket.. so it allows in our market someone is 100 to 150k liquid to buy a foreclosure.. now when you add on all their points 14% interest rate their buying fee etc etc.. the deals become PRETTY SKINNY.. and most that do it are newbie types.. They market hard for their borrower investors. as they burn through them .. because many frankly just don't do that well and take a huge risk buying a home that has not had an inspection. And I the Bay AREA were you have VERY cashed up folks you can expect keen competition.
THX @Jay Hinrichs for the detailed reply!
I do have cash partners but I can see this will be a complex transaction. Inspection, appraisal, back taxes, lotta things to consider.. Def not newbie friendly
foreclosures don't work that way... you would be wasting a ton of time and money if you try to analyze these like your buying a property either listed or off market.
1. unless you break into the house your not going to get any inspections done.
2. title work is simple you should have that set up with your pet title company and they do it all for you in a matter of hours.
3. back tax's will be found in 2 minutes.
4. no appraising this is were a true foreclosure buyer knows values and sets their own values.. you can run it by a RE broker to get a BPO... but no one does a true appraisal on a foreclosure home.. If your going to be in the business you should have RE broker already on your team and in exchange for getting list backs they do the front end evals on values.. Now when I used to do courthouse steps I did not trust anyone for values .. and since I am a Broker with access to MLS I did my own evals.
To truly be in this business in the bay short of maybe getting lucky to buy one prop a year you need team work and methodology to be able to assess a property in a matter of an hour or two. because the one you get focused on probably will not go to sale very few actually do. so you need to be evaluating 100 or more to get a shot at one..this is what seperates those who are successful to those who think they may want to try it.. its not really a mom and pop business on the west coast.. you can do this in the mid west no problem low values and tons of activity.
BP is an incredible resource for knowledge and support because of members like @Jay Hinrichs aka Jam Master Jay :-)
In this market I see having a team is a must. I will definately be attending the next local MeetUp!
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