Nearly 9 percent of mortgages are in forbearance. Discover a new kind of real estate investment and uncover profits on your local courthouse steps! Welcome to the world of buying foreclosed homes at auction—a real estate strategy that removes the middleman, decreases your competition, and lets you buy at a discount. In the newest book by BiggerPockets Publishing, New York Times bestselling author @David Osborn and foreclosure expert @Aaron Amuchastegui give a full blueprint of the foreclosure-buying process, including the repeatable five-step method they have both used to buy thousands of properties. If you purchase from the BiggerPockets Bookstore, your book comes with free bonus content, like a Live Q&A session with each author and an online resource pack for foreclosure investing—with worksheets, spreadsheets, sample documents, and more! If you’ve been wanting to invest in foreclosures, now’s a great time to learn as much as you can about the process. Bidding to Buy is available now in all formats.

In my opinion there is no need to start an LLC when you are first starting out. If you only have 1 or 2 houses the risk to you personally is relatively low and you will be able to get better rates with personal conventional financing. Start analyzing deals in different areas and then go look at them in person. See how the neighborhoods are, are there any board ups? Parked cars on the lawns? Commercial real estate close by? Talk to private money/hard money lenders and just get a feel for the rates. They are more than happy to talk with you as a potential client and answer your questions. Once you have an area and financing then talk to your agent and go look at the deals that make the most sense for you. Like Brandon Turner always says don’t be afraid of the smelly ones as that’s an easy fix. Know your numbers and make offers that fit into your numbers. Don’t make a house fit into your numbers and don’t get emotionally attached to any one deal. Enjoy the process!

@Mindy Jensen Loved the episode on this last week!

@David A. Unless you are a licensed lender or broker title companies are not going to give you free resources. Also getting the report without paying for insurance doesn't give you any protection as most tax liens, bankruptcy proceedings, lis pen dens and the millions of types of clouds can show up in the afternoon after the report was run. Only reliable source is to date down at closing and pay for the title insurance.

Very interesting topic indeed! Foreclosures will definitely get more popular around the end of August, and when winter arrives again. Currently, the markets are being propped up by a sudden increase in buyer demand so I would say that this is definitely something to look into.

Account Closed Chapter 7 is entirely dedicated to title review. It includes 17 pages that detail how to do this on your own using city/county records, what red flags to look out for, etc. Hope this helps!

If the bank doesn't have title yet I'm not sure why they entered into a contract to sell it yet. It's possible the borrower has objected to some part of the foreclosure process and either the bank's attorney agrees there was a screw up or the borrower is appealing the foreclosure. If you can you might take a look at the foreclosure file and see what the status is and decide if its worth pursuing the purchase.

I would be trying to find out if the county the property is located in let's me view records online concerning the property. The best place I know to find out the quickest nationally is at netronline.com. I'd also be opening a pacer account. Pacer is for the search of bankruptcy cases. Usually, before a home is sold at auction the investors/note holders/note owners may have already entertained selling the note at a discount. Many servicers do this before sale. Many don't know who is doing what. Many entities are involved in recording fraud against many. It makes the industry difficult for many. Foreclosure trustees who receive accounts for collection(refuse to get collectors title search machines!) Can you imagine calling someone demanding money, and not have confidence in what your able to tell someone? Could you imagine your employer at the acceptance of position telling you yes you have the ability to do xyz for xyz, and have it not be true? I took my signatory signature pretty seriously with a fiduciary responsibility to represent the truth. That if I signed my name to a debt settlement or note sale that I had done my due diligence. As I often performed the managerial reviews at agency for best worked efforts before closing. I actually moved about $100,000 to $150,000 per month in recovery fees monthly for agency. This was for accounts that had been taken as a write off for whatever reason. It's disheartening to be stripped of everything when you always attempted to treat others with the same dignity, and respect you'd hope to get out of someone. Everyone, needs many things to survive in this world. We all agree an education is imperative. Work ethic is a necessity as well. Everybody wants to be paid. But many are not in the business of building people. How many times my boss would be like the client placed it here. They know it's here. NOW COLLECT IT! Usually I did to. But I always attempted to be honest, and fair. As it was my job to motivate you to pay me how much? I think I'd better be pretty precise with my 1st contact with you. A home or property is the most important asset many own. Yet the people who work to pay for the asset are not important to many. How many times I'd have to call my employers client to HAVE ACCOUNT YANKED to AVOID LAWSUITS! The board of directors for the employer who lied about their written contractual ability to do things has been sued multiple times producing/enforcing fraud for just about every servicer in America! Hell in my life they've successfully for over 80 years claimed my family never existed! Along, with make $200 million plus assets! Yet I'm the STUPID ONE! I never would have suspected so many involved in all of this. Be VERY CAREFUL. True law, and order against many is not what you hear, see, or read in many outlets. While many will claim we're supposed to have protection in courts many times it's not given. Benefit of doubt to tell the truth is unheard of for many. The reality of this life, and world is difficult without credible information! Can you imagine having to do a DNA test to get to the bottom of the many lies we're told?

Want to start investing in foreclosures?

Gerald JordanPro Member

Investor · Columbia, MD · Member since 2014 · 35 posts · 7 votes

6y

@Todd Pultz Good information Todd. I have not given the approach a thought and this is some great information for me to churn on and begin to incorporate. I have held the LLC now for about a year and a half and have begun to think of the next property purchase under the LLC. The accountant I work with suggested that I not use the LLC for the first property as I did receive some perks and being that it was a foreclosure I was able to walk away with 6K in equity from the start. I tried to offer a price but the bank came on strong and my realtor said they are not going any lower. I received a small schooling at that time. Basically, I have done well and I had felt using the LLC for the next property shall be a go. Thank you!

[email protected]

1 Reply

Judner Attys

Member since 2020 · 21 posts · 4 votes

6y

Im about 3 weeks in now so excuse my ignorance, but is it possible to wholesale a foreclosure? Im trying to decide on my niche. I'm teetering back and forth between wholesaling, foreclosures and single family homes. Is a wholesale single family foreclosure in the realm of possibility? Be kind to the rookie.

I have read "The Millionaire Real Estate Investor" and on the second read of "The Book on Rental Property Investing" Excited for what the future holds!

1 Reply

Gerald JordanPro Member

Investor · Columbia, MD · Member since 2014 · 35 posts · 7 votes

6y

@Todd Pultz By the way Todd as they say small world, I am from Dayton Oh and left WSU and went to school at HU. You may know my uncle, Byron Mayberry has been active in RE. So there we have a commonality.

[email protected]

0 Reply

Jay Weathersby

Rental Property Investor · Orlando, FL · Member since 2019 · 44 posts · 48 votes

6y

Originally posted by @Sam Jurgenson:

Interesting subject. I have been working with borrowers doing refinances that are currently in forbearance. We are seeing more and more have to take this path as people are unfortunately losing their jobs. There will be advantages coming soon for those that have played this intelligently!

Just curious what advantages are you referring to? I'm assuming being able to defer those mortgage payments to the end of the loan while pocketing the rent. If so this has been one of the sweetest deals ever.

0 Reply

Jeremy Dance

Member since 2020 · 3 posts · 0 votes

6y

@David A.

If you are aware of one, could you point me in the direction resources that teach how to do title searches for free?

0 Reply

Jeremy Dance

Member since 2020 · 3 posts · 0 votes

6y

@David A. Good point!

0 Reply

Steve Morris

Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes

6y

IF you have a very good friend in a title company, if there is a pending action (like filing notice of default or lis pendens to use lawyer talk), they can pull those since they have direct access to the county databases.

I would not abuse it though.

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Peter Walther

Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes

6y

Originally posted by @Jeremy Dance:

@David A.

If you are aware of one, could you point me in the direction resources that teach how to do title searches for free?

Doing a title search is maybe half the process, the other part is examining the documents and understanding their possible affect on the title. The ability to do that accurately only comes from time and experience. Keep in mind also that some things affecting title may not be identifiable in a title search such as forgery, fraud, incompetency and mis-indexed or unindexed documents.

1 Reply

Bruce Franco

North Arlington, NJ · Member since 2017 · 4 posts · 2 votes

6y

There are investor friendly title companies for that will give you a run down on title for $75. Everything you will need to know in order to make an educated decision (judgments, liens, taxes, lis pendent etc.)

1 Reply

Ron S.

Paradise, CA · Member since 2015 · 1k+ posts · 871 votes

6y

Originally posted by @Brett Costantino:

I have a foreclosure under contract currently in Baltimore, MD and 2 days before closing the bank came back to us and said they didn't have the title yet and it could take up to 2 months. Is this common or is the bank just taking their time for some reason? Also, would it be appropriate for me to ask for a lower price because now instead of getting a renter in during the busy summer moving season I now have to wait until possibly mid fall?

No and no. Not common (Doesn't even make any sense) They wouldn't have "title" unless it was REO. If its REO, you don't have a "foreclosure" under contract, you have an REO and if you have an REO, ownership transferred via Trustee's deed (Assuming its a trustee state).

you can ask for whatever you want to ask for. Doesn't mean you'll get anything you ask for.

0 Reply

Ron S.

Paradise, CA · Member since 2015 · 1k+ posts · 871 votes

6y

Originally posted by @Brett Costantino:

Is there a way to find people in forbearance who would be willing to sell before foreclosure 🧐 (some sort of database)

no.

1 Reply

Jonathan Oh

Investor · Las Vegas, NV · Member since 2019 · 499 posts · 259 votes

6y

I feel like a wave is coming soon. Once stimulus checks start drying up, it will have a nationwide effect. Unfortunately, I think this will land particularly hard for lower-income folks.

0 Reply

Robert Haney

Investor · Sugar Land, TX · Member since 2016 · 62 posts · 48 votes

6y

Originally posted by @Judner Attys:

Im about 3 weeks in now so excuse my ignorance, but is it possible to wholesale a foreclosure? Im trying to decide on my niche. I'm teetering back and forth between wholesaling, foreclosures and single family homes. Is a wholesale single family foreclosure in the realm of possibility? Be kind to the rookie.

I have read "The Millionaire Real Estate Investor" and on the second read of "The Book on Rental Property Investing" Excited for what the future holds!

Judner,

I didn't see that you received an answer.

Yes, you can wholesale a foreclosure that you have purchased at the county auction. I have done this a few times when I decided I didn't want to do a fix and flip - usually because the fix vs profit ratio was too low. I always list the wholesale on the MLS instead of "an investor list" since the MLS is where new investors tend to pay the highest price.

1 Reply

Judner Attys

Member since 2020 · 21 posts · 4 votes

6y

@Robert Haney Thank you!

0 Reply

Leonel Lerena

Santa Cruz · Member since 2020 · 11 posts · 2 votes

6y

So what is the moral of the story when it comes to foreclosures? Sounds exciting, but something be very familiar with.

Now what has helped you properly buy foreclosures if you have already done so? Any advice?

0 Reply

Kumar Raja

Member since 2020 · 4 posts · 0 votes

6y

Yes for sure

0 Reply

Robert Haney

Investor · Sugar Land, TX · Member since 2016 · 62 posts · 48 votes

6y

Gerald,

Schooling is not usually fun, but should helpful. Let me make some comments for you to think about.

- At the foreclosure auction a group of both seasoned and unseasoned investors judged the property to be a deal too poor to buy. Therefore the bank was FORCED to buy it due to the price they set. Therefore the bank became the homeowner. The foreclosure was then over.

- The property was no longer available for foreclosure purchase.

- If you sold the property and paid your selling costs, would you have $6k equity or less, even a loss? I always look at all costs including selling costs even if I'm going to hold the property. That's so I don't fool myself about day-1 profit Or "equity".

- Be aware of allowing your RE Agent to talk you out of making (lower) offers. The agent has "an ax to grind". Only you have your best interest at heart. They may be right or they may be just trying to do a deal quickly to earn a commission.

- How do you know "the bank came on strongly"? Did you negotiate directly (unlikely)? Did your agent tell you this to apply pressure to you?

2 Reply

Wale LawalBusiness Member

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

6y

I learned alot from that episode @David Osborn and @Aaron Amuchastegui did a great job explaining the Foreclosure process.

Thank you guys

[email protected]832-776-9582 Podcast Guest on Show #469

NETWORTH BUILDERS5236 Reviews

Website View Page

1 Reply

Robert Haney

Investor · Sugar Land, TX · Member since 2016 · 62 posts · 48 votes

6y

0 Reply

Robert Haney

Investor · Sugar Land, TX · Member since 2016 · 62 posts · 48 votes

6y

Originally posted by @Caroline Gerardo:

a preliminary title report is of no value even if it was free to you

I disagree. A preliminary report from a title company is MUCH better than NOTHING prior to a foreclosure auction.

It is also typically better than a title search done by an investor. Why? The data bases used by title companies are larger and more robust than what is available to the investor. An investor typically just has the country recorder's office and the tax office.

The country recorder's office and the tax office is generally enough to research prior to the foreclosure auction. I've done this hundreds of times (40 to 50 per month) and only been wrong a couple of times on houses I've bought. Even when wrong they were not "death blows." It is part of the risk that MUST be accepted by the investor.

Being part of the regular professionals at auction, I have been helped by regulars and I have helped regulars regarding title issues. A benefit of being in the club. Newcomers are generally not afforded this help since new competitors are not exactly welcomed. Surprise surprise. Regulars will sometimes run up bid prices on newbies.

Bottom line: The "Bidding to Buy" book is very good for newbies. There is more to learn that is not discussed in the "Bidding to Buy" book. (How to handle Fed tax liens, home equity loans and leins vs conventional loans and liens, reverse mortgages vs property taxes, collecting rent instead of paying cash for keys (I've collected $10k this year before people vacated), when to safely start renovations, how to wholesale your foreclosure, etc.)

3 Reply

Dave R Ludolph

Specialist · Cape Girardeau, MO · Member since 2020 · 43 posts · 9 votes

6y

Can anyone inform me as to how i get access to foreclosure information for free? Is that even a thing or must I pay to have access to this?

0 Reply

Ray Lin

Rental Property Investor · MS · Member since 2018 · 68 posts · 47 votes

6y

Foreclosure information is free. The notice of sales is posted at the local courthouse bulletin boards and advertised in your local newspaper. It's free to visit the courthouses. You may have to pay a small fee for the newspaper.

0 Reply

Ray Lin

Rental Property Investor · MS · Member since 2018 · 68 posts · 47 votes

6y

Foreclosure information is free. The notice of sales is posted at the local courthouse bulletin boards and advertised in your local newspaper. It's free to visit the courthouses. You may have to pay a small fee for the newspaper. Also, a lot of newspapers have an online version, you could read the classified sections for free. The lawyer's website is a good place for free listings as well.

0 Reply

Colin G Murphy

Investor · Tampa, FL · Member since 2010 · 263 posts · 159 votes

6y

I´m about two thirds through the Bidding to Buy book and I would recommend it to anyone looking to learn more about purchasing real estate in foreclosure auctions. I´ve bought 100+ single family homes in public foreclosures in the Tampa Bay Area in the past 5 years and it is absolutely necessary to understand chain of title & lien history.

In my area, practically everything you need to know is available online and can be accessed in minutes (public records, permit records, property appraisers website, foreclosure website, tax collector website). You learn a process and you repeat it dozens or hundreds of times until you get great at it. I did title research on lots of properties myself before bidding on one - just as people should get lots of practice calculating ARVs before buying. A lot of folks worry about buying a 2nd or 3rd mortgage by accident - those are rare in foreclosure auctions (at least they are in Florida) and you can verify the position of the lien in minutes for any property.

I did the majority of my purchases in one county and spent a lot of time navigating and learning my way around the websites that provide the background information needed on ownership and lien history. Literally dozens of hours before spending a dime. It helps a lot if you can learn to love and appreciate the process - it is not that complicated once you´ve spent enough hours at it. I had a title agent mentor me through the first 20 or so successful bids. I did my thing, he did his and we compared notes. Initially I missed a lot of stuff that he picked up and eventually I caught up. He got the title work on resale if/when I got one. Later when I started scaling a bit, I stopped doing pre bid title work myself and switched to an attorney who ran the searches on my behalf and provided quick single sentence feedback on what I needed to know (eg. 1st mortgage, no lien or 1st mortgage, unpaid HOA & utility) and I would adjust bid price accordingly. Again, the attorney got the title work on resale when we resold them a couple of months later.

@Account Closed & others: I guess what I´m trying to say is don´t let the mystery of titles and liens stop you from diving deeper into this world. There is a lot of money to be made when the next wave of foreclosures finally arrives. I´m not suggesting you bid without knowing what you are doing - but there is plenty you can learn before you bid actual cash. In most places, the title & lien info you need is in three or four websites you need to learn your way around. Eventually you´ll start seeing the same patterns again and again.

Maybe you need to pay up front for a bit of education or maybe you can convince someone to teach you about title for a zero or nominal fee in exchange for work post purchase. Either way, it will be a worthwhile investment if you stick at it.

3 Reply

Colin G Murphy

Investor · Tampa, FL · Member since 2010 · 263 posts · 159 votes

6y

Hi @Account Closed - I take your point, but I don´t think it is such as exclusive club. Just because some investors can get title searches for "free" due to relationships and scale, doesn´t mean you can´t bid and buy a handful yourself (especially if you intend to keep them and don´t require the margins of a fix and flipper).

In terms of established players knowing more about a houses condition - that comes from experience and preparation. You can learn a lot from previous MLS and permit records. Also, some (brave) bidders knock on doors and try to chat to occupants prior to auctions. If a house is vacant, an experienced rehabber can learn plenty just from looking through the windows.

Just to clarify; nobody gets title insurance when they buy in a foreclosure auction. That can´t happen until after you´ve bought it with cash, waited for the certificate of title to be issued (2-3 weeks in Florida) and paid for a title search and policy.

1 Reply

Want to start investing in foreclosures?

Want to start investing in foreclosures?

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