Properties With Padlocks ?

Question

Hello Bigger Pockets Family ,

I just had a quick question regarding homes that are empty but have padlocks on them . I was curios if these properties are bank owned . I am a wholesaler and have no interest in bank owned properties (Yet!) . I also noticed postings on homes that are vacant and do not have a padlock , but have postings on the window (usually with blue tape) . I am also curious if those properties are bank owned or have been repossessed by the lender . Your time and feedback is greatly appreciated !

-Chris Smith (New Jersey Wholesaler)

Ned Carey · Answer

@Christopher Smith

Not necessarily, Like I said I have padlocks on some of my vacant properties. Many rehabbers have padlocks on their properties. The bottom line is, it doesn't matter.  You don't care why there is a padlock on the door. The fact there is a pad lock is a sign of something is not the norm. That may mean opportunity. Then again it may not.

This is an important lesson for new investors. Stop trying to figure out why a property is in the condition it is in, IE: lockbox, boarded up, or long time vacant.  You will drive yourself crazy and probably come to the wrong conclusion. The WHY doesn't change how you approach the deal. You find out who the owner is, and you talk to them. You go through those two steps regardless of why the property is the way that it is.

Christopher Smith · Answer

Thank you so much for your response @Ned Carey . So basically if its a padlock on , then its safe to say that the property has been repossessed by someone other than the previous occupant ? I dont mean to sound redundant . Safe to say it's not a simple answer because it can vary . Again , thank you for your time and response !

Ned Carey · Answer

@Christopher Smith its your first post welcome to BP.

A padlock could be bank owned or not. I have padlocks on many of my vacant properties before I sell them. The sign in the window often says something like this:

"The lender has inspected this house and it appears to be vacant. The lender has changed the locks. "

This is put up by the servicer of the loan. Often this is a case of the homeowner being in default and leaving the house. The bank secures the property, but does not own it yet. It may be in pre- foreclosure, foreclosure, or the bank now owns it.