Auction.com HELP! I won the bid but now having second thoughts
About a week ago I was the winning (and probably only bidder) on a town home that I thought was a good deal and would make a good flip or buy and hold. The property was being sold subject to the redemption period and is currently occupied (foreclosure sale was 2/10). I drove by it a few times and it looked decent from the outside and was able to see pictures on the MLS from the owners trying to short sell it in the winter. The winning bid amount was $110k and the comps were $170 so I figured it was low risk to hold it for a few months until the redemption expires and then deal with getting the occupants out. I've done flips on these town homes in the past and even in horrible condition they are usually $10k give or take to put them back into shape. I have already signed the PA with Auction.com and sent in my earnest money. The seller (Wells Fargo) is paying for buyers title insurance as well.
My excitement for this deal has been deflated in recent days after doing some research. I discovered that the bid amount at the sheriffs sale was $133k well under the $200k that the owner owed on the property. I also discovered that the notice of sheriff sale that was posted in the paper indicated a redemption period of 12 months!!! MN at least used to be 6 months so thats what I was expecting. Apparently they changed the law this year where if the borrower owes less than 2/3 of the original balance then redemption is 12 months...not the case here so how could it be 12? I also noticed that the owner quit claimed the deed to a LLC in December which turns out to be an attorneys office! Now my wheels are spinning and Im not sure if I want to proceed with this sale. I have some questions to anyone with experience or a similar situation.
1) Do you think someone (another investor maybe) may have taken over the deed in order to eventually redeem the property? The sheriff payoff is only $133k and the house is worth about $170. If this happened would they have to pay me the $133 since I would own the sheriff deed?
2) Is it likely this gets redeemed by the owner or refinanced by someone during the time I would own the sheriff deed?
3) Whats up with the 12 month redemption? I see the law has changed but the amount owed by the borrower should have kept it at 6 months
4) What can I do to take possession of this property sooner? I don't want to tie up $110k for 9 months.
5) What are my other risks or is there something else I'm not considering?
Thanks in advance,
Jason