So I've had my eyes on a vacant apartment in Denver for quite some time, but only recently started to look into it more. I used to live in the building so I have a bit of inside info on the property. It needs a full fix and flip (I put together an estimate and have an ARV) and the potential is substantial. My initial plan was to contact the owner to make a deal. However, in my research, I learned the property is going to auction in 10 days!
Does this mean the bank has taken possession and the auction is inevitable? Or could I still make a deal with the owner?
What could/would a deal like that look like?
Unfortunately, my job is taking me out of state next week and I won't be able to attend the auction even if that was the only way.
Any advice to get the property before it goes to auction? Thanks!
My understanding is you still have an opportunity to keep it from going to auction if you can bring cash to settle in time. If there's really good opportunity and you don't have the cash you should be able to find a partner to either help you with that or who would buy it at auction. We watch the lists every week and have a few people interested in those. Let me know if I can help.
You still have time to contact the homeowner, but they would have to want to sell and if they did you would have to move really fast. You would have to close with cash or private/hard money that could close in 4-5 days or so too, you would need the homeowners permission or get them to order their payoff from the foreclosing attorney as well.
This is all assuming the owner has equity in the property, if they dont, you could try REALLY hard to get a postponement for them to consider a short sale.
@Steven Tawresey the first step is to get an idea of what is owed. Short of what Anson said, with a such a short lead time, you might want to look and see if there are any second liens on the property that you can scoop up and take out the buyers. Also if you can get a contract, the owner might be able to contact the bank that owns it and get an extension. There are always a few properties that don't sell when they are scheduled to sell. They get extended while someone gets their act together. These are all rather long shots but are options.
Originally posted by @Bill S. :
@Steven Tawresey the first step is to get an idea of what is owed. Short of what Anson said, with a such a short lead time, you might want to look and see if there are any second liens on the property that you can scoop up and take out the buyers. ...
Not sure why you think getting a second lien here is worth pursuing; there would have to be lots of equity for that, and if there were lots of equity the owner could just sell ...
@Steve Babiak that's exactly right and why I said it was a "rather long shot".
Thanks for the responses everyone. After digging into it a little bit, it looks like this is the 3rd time the owner has foreclosed in the last 3 years. The first two were on the original note of $165,000. She cured her debt before it went to auction each time. In 2013, The outstanding balance on the original note was $79K.
The note being foreclosed on now looks like a 2nd or possibly a 3rd lien. When I add up all the visible liens, there is still major profit in the deal. $150k +!!!
Maybe since the place is a wreck, the owner doesn't know she can sell? Maybe she knows exactly what she's doing and plans to settle for less than she owes. I don't know.
I'm going to call today, but I doubt I'll get any straight answers.
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