Is it possible to borrow money to purchase a foreclosed property?

Question

I have always heard that you need cash to purchase a property from the auction and I wanted to see if anyone in the BP community has heard differently or has any suggestions as to how to raise enough capital to purchase a property at the auction.

Kerry Boyle · Answer

This is a very state-by-state specific questions (and in some areas, county specific). I'm not familiar with Arizona.

In some states, HML's will refinance the cash-purchase foreclosure that the borrower's made to increase liquidity again. In other scenarios, the HML can buy the property with a portion of the borrowers money and they can transfer the property over to you after completing UW.

I'd love to have other lenders chime in on how they work foreclosure purchases.

Corby Goade · Answer

You need cash to buy at auction, but it doesn't have to be YOUR cash. Get to an investor's group meeting in your area and meet some hard money lenders. You might be able to get them to come to auctions and you can bid using their money. You pay them your agreed upon fee and once you own it, you can refinance and do it again.

Bob Okenwa · Answer

I don't know any banks that will loan to properties purchased at a foreclosure auction. The auction trustees usually want payment on the spot or the next day and no bank can underwrite a loan that fast. You will want to seek out hard money lenders that can close quickly to be able to make such a purchase if you do not have the cash yourself or find private money to do so.

Brian Gibbons · Answer

Banks don't want to risk foreclosure purchases so we usually use joint venture partners and private lenders to be able to buy at auction