A friend is about to lose a cabin that has been in his family since the late 60’s or early 70’s. It is on one acre less than an hour from Colorado Springs. Uphill.
The cabin is about 950 square feet, has electrical service, no well, no septic. The inside is not finished but it is insulated and vapor barriered, along with completed wiring. At one point is was ready for drywall, but now woodpeckers have blasted enough holes in the siding that all the insulation needs to come out to check for nests, bodies and all other denizens of the wild that may have found their way into the dwelling.
He told me it is going into foreclosure in September. I asked him for the numbers. He said he doesn’t know, ask his sister. I talked to her two days ago and she said they need fifty grand. Then she said they owe 42 but have three years of unpaid property taxes which amount to $1550 according to the assessor. She then told me how it’s the banks fault, they are too hard to deal with… blah blah. I have heard that since they started missing payments a few years ago.
Let’s say that the kids have never been… financially prudent. And they are in their 50’s now.
Enough about them. Let’s discuss me!
What is my best approach with the bank? I’d like to offer cash. Present an opportunity to save both of us money- US Bank doesn’t need to foreclose and I get to build a cabin.
Should I wait until foreclosure and
try to steal it there? Um, I mean, attempt to save it? You know, for the family.
I know I should wait for the numbers, but I want to have the next steps planned out.
I know this post isn’t about maximizing return on an investment property. I have always wanted a cabin in the woods. So there.
Not sure I am interested to see what others tell you. I can tell you that here in the Springs the auctions seem red hot. Here we have the el paso county trustee office of which I can look up exactly what the deficiency and I can know from there what the bank bid will be at auction. Soo auctions are a risk short sale?? sounds like there is some time
if you are going to acquire before the foreclosure sale you are going to have to figure out a deal the current owners will take. If you are going to offer less than the owed amount you will need to negotiate with the owners and the bank. If you wait for the auction you will have to hope the property goes to auction at the amount the current owners owe plus any fees assuming the bank doesn't just take it back and go to market.
A lot of moving parts - doesn't mean it isn't possible, just means there is some work to do. If I had your shoes on I might look to see what cabins are selling for that are actually complete rather than buying this one and having to compete the repairs. If you have the cash you can approach from either angle.
Originally posted by @Travis Sperr :
If you are going to offer less than the owed amount you will need to negotiate with the owners and the bank.
If I had your shoes on I ...
Might run very far?
The problem with the owners is they think the place is worth way more than it is and are willing to lose the place rather than, "get screwed".
@Eddie Memphis then you likely don't have a deal with them and need to explore buying at the auction. Only so much you can do while they own it. If you want the property just follow it to the sale. Being that it is a little more rural maybe the lender is local? If so see if you like can buy the note and foreclose on the property.
@Eddie Memphis What is a bare lot selling for in the same area? The building sounds like it is a liability. Is it on a foundation? If not, it is a liability. Other than that @Travis Sperr covered it. Take your cash to the auction. You should find a local title company to do and O&E (Ownership and Encumbrances) on the property. It costs $5 and can all be done via email. If there is a junior lien you can purchase it and then you have the right to buy out the note holder as well. The O&E is the first step. The foreclosure should be published and it should give you an idea of how much is really owed as well.
Once it get published in the foreclosure notices, they will get swamped with offers. If there is equity there you need to make sure they know you want to buy. They may not deal with you as they don't want you (a friend) knowing their financial situations.
If you have the cash you might offer them $1K (or something) each to sell to you and then you take out the bank.
I can't believe that a bank would allow the taxes to go unpaid. That sounds fishy but there are stranger situations.
Originally posted by @Bill S. :
@Eddie Memphis What is a bare lot selling for in the same area? The building sounds like it is a liability. Is it on a foundation? If not, it is a liability. Other than that @Travis Sperr covered it. Take your cash to the auction. You should find a local title company to do and O&E (Ownership and Encumbrances) on the property. It costs $5 and can all be done via email. If there is a junior lien you can purchase it and then you have the right to buy out the note holder as well.
When you say local, do you mean same zip code local or same state local?
Same county or general area in reference to the title company. You might try some title companies in Colorado Springs - like Empire Title. Theoretically you should be able to use any title company but often times local to the property can produce better results.
The cabin went to auction in early October. It sold for $1.17 over auction price. A little over over $37,000. I texted him the info and I received this text, "good riddens".
What a poor mentality. To abandon an asset is maddening. That's why he is a renter.
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