Advice on buying a Foreclosure Property

10 Replies

Hey Bigger Pockets my first time posting on here instead of just reading the forum so that's exciting. I need Foreclosure buying advice. I am interested in buying a Foreclosure Property soon and have read about the process a good amount but would really love to have someone to talk with experience in the Foreclosure process who really knows what I have to watch out for. My goal would be to buy it cheap, live in it, fix it up myself, and then eventually rent it out.  This would be my first property. I live and am looking in the Raleigh/Durham Area. Thanks guys! Have a good one. 

Hi Nicole.
For the most part the foreclosure process is straight forward, however let me ask first.... is the property your looking at currently in the foreclosure process? Or has it been foreclosed and now bank owned? Or is it due for auction and you looking to purchase it at auction?
The scenario’s are very different which is why I️ ask.
John

Hi Nicole. Buying at auction can be very tricky, especially if you haven’t been in the house. Your buying as is. I️ can only talk from California experience, but for me I’ll only follow a property to auction if I’ve at least seen inside, and then also been able to make sure about other liens/judgments etc that could be against the property. Outside of that, for me it’s just too risky to know exactly what you are getting.

@Nicole DeGabriel I’ve bout a house from Auction dot com, it was a foreclosure. It had/has a city lien against it for lawn service, I leave it for the lease option tenant to pay me in the future.

You will get a special warranty deed, that basically means the seller/bank/auction house is selling where is/as is, and you, the buyer are responsible for all liens with the property. So do a simple $50 title search now with a local title company and learn what you are getting into now, before investing lots of $$$ and time into the deal.

I love foreclosures, they are like giving a house a tune up. Some have been our best deals! Best of luck to you.

Originally posted by @Nicole DeGabriel :

Hey It is up for auction. 

There are foreclosure auctions and then there are owner auctions. 

REOs (bank-owned properties that have already gone through foreclosure) are sometimes sold using the auction method... but they are owner auctions.

Be very sure of the type of auction you are participating in. Read and understand fully the auction terms. Once you clarify we can be more helpful.

Thanks for all the great info guys. It is a courthouse steps auction. I like that idea for the $50 title search. Thank you Jack. It is a 2 bedroom 1 bath house. And John yes it would definitely be a risky first property for me since no I have not been inside. Just struggling to find a good affordable deal in the triangle area so thought I should try the foreclosure route. 

We are just starting to get involved in these court house step auctions.  For the first property, we paid our attorney $150 to do a title search.  I'd be interested if anyone has any recommendations of a title company in NC who could do this for the $50 mentioned above?

NC uses attorneys for title search, I doubt there is a reputable title company in NC. I've used title companies and escrow companies in other state and have been satisfied with their results. 

JP

Can anyone suggest best practices for participating in these auctions?

I'm particularly interested in how other investors navigate the title situation.  I assume they are not paying for $150 title searches on every property they bid on.  Are there any other ways to feel relatively safe you will not be hit with a big unknown lien once you buy?

Can you get financing on a foreclosed or pre-foreclose property . What will be the best way to buy this property if you don't have money to pay for it cash?

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