Bidding on an REO that's occupied by owner's children

15 Replies

I'm in Los Angeles, CA and I'm looking to bid on an REO on the auction site "HomeSearch." It's occupied by the children of the deceased former owner...and perhaps all their high school buddies as well. It's a rather intimidating looking crew to even drive past. There are lots of them and they have VERY nice cars for congregating around this virtual tear down. Hmmm...drugs? I'm not sure. And as usual, there is very little info.

Does anyone have any thoughts about how much of a battle it would be to evict descendants of the deceased, foreclosed-upon owner... and all of their friends (think Boyz 'n the Hood)?  

I'm sure things are much more difficult as far as evictions go in Los Angeles vs my town.  I can usually evict in 7 days.  It should not be any different evicting the descendants vs the original owners but they may be considered "squatters" and it might take longer.  Good Luck, Mike

Hi @Michael Hicks  Thanks for your response!

 I've been reading about the process in California for evicting squatters.  If they respond to the unlawful detainer complaint and wish to go to court, it looks like it could take a month or more to get them out.  

I'm almost less concerned about the legal process than I am about retaliation and an "illegal" response.  It's a rough neighborhood!  Does anyone ever hire a security guard?

Usually people living in situations like this are hurting for money.  In the past, I have offered $500-$1000 if they are willing to be out in 15 days without any additional damage to the property.   I have it in writing,  witnessed and do a walk through of the home with them and make sure they are clear on the terms.  If they comply, I pay.  If not, proceed with eviction as normal.   Good luck,  Mike

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Talk to the neighbors and maybe they can give further info on the property. People always like to talk to the neighbors about what's going on in their life and perhaps the former owner shared insight as to their kids and needs? Just a thought.

Thanks @Kyle Penland

Any idea if it is legal to just knock on the door of the house in which I'm interested?  Or is that considered trespassing for some reason?  Talking to neighbors is a good idea.  Thanks!

And thanks @Michael Hicks  I'll keep that in mind.  The whole thing makes me very nervous, especially when I read Bigger Pocket threads like this:  

Can't evict a squatter:  http://www.biggerpockets.com/forums/16/topics/1036...

Since this will be my first flip I'm wondering if it's smarter to start with a non-occupied property!?

Yes, do not knock on the door!

Depending upon how much they want to fight, @Faun Kime , it can take a while to get them out and one to six months would not be unheard of.

Without other info, from what you write you could pretty much assume the home is already trashed and will need a full gut rehab. Knowledge is king of course, and there is nothing illegal about knocking on a door and asking the occupants if they know that the home will be auctioned soon to new owners, and inquire about their intentions? With luck you could duck your head in and check out the premises. Door-knocking to NOD's and the like is very popular lately so you might take someone experienced at this to do the talking, or at least ask them what to say.

You would normally add to any offer that the home must be vacant upon closing and make this the seller's problem. Not the case with an auction however, which will require you to close as-is, where-is, and accept the good with the bad. This should be priced into your bid. Plus, how are you be funding this? Most lenders will require the property to be vacant at closing.

We work with some rehabbers who are completely fearless, and able to deal with a range of distressed properties from severe foundation issues to areas you'd never go to after dark. There are solutions for all of these -- yet no one will close on an occupied property if they can humanly avoid it.

Maybe not for a first timer, but none of this means avoiding the property. It means acquiring the information you need to bid appropriately (i.e. not blindly) and perhaps cutting a deal that others can't, in advance.

Originally posted by @Faun Kime :

Hi @Michael Hicks  Thanks for your response!

 I've been reading about the process in California for evicting squatters.  If they respond to the unlawful detainer complaint and wish to go to court, it looks like it could take a month or more to get them out.  

... or four years and counting!!!

@Roy N. , squatters is something I've never had to deal with and from what you've found...I'm glad.   Not very common in my area thank goodness. 

Originally posted by Jeff S Na:

We work with some rehabbers who are completely fearless, and able to deal with a range of distressed properties from severe foundation issues to areas you'd never go to after dark. There are solutions for all of these -- yet no one will close on an occupied property if they can humanly avoid it.

I had to laugh at this...sounds like the scariest thing to a rehabber is an occupied property. Your post was very helpful and I'm definitely taking a pass.  On to vacant properties!   Thanks again!

Originally posted by @Roy N. :

... or four years and counting!!!

Sounds like a nightmare!... is this in Canada or the U.S.?  

Originally posted by @Faun Kime :
Originally posted by @Roy N.:

... or four years and counting!!!

Sounds like a nightmare!... is this in Canada or the U.S.?  

It's in California and BP's very own Will Barnard is the patient sole on the receiving end of the nightmare.

@Faun Kime

 I would be very careful trying to buy this type of occupied property for your first or even fifth go round! Lots of bad things can happen and if you do not have the experience or financially abilities to ride out an expensive hold period, you will not come out looking pretty. Be very careful. I would suggest going after some other opportunities before trying your luck at this one.

@Will Barnard   Sorry to hear about your 4 year saga.  I heeded your advice and  sat on the sidelines.  The action is now over and went about $12k above what I was willing to pay. I'm going to keep my eye on the property to see how this story ends and am looking for vacant properties now.  Thanks again for your thoughts! 

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