I am new to the investing world and had a few questions. I am currently renting a condo that is going to auction in 2 weeks. I have been pre-approved for either conventional mortgage or the VA homeloan. I understand that auctions are all cash. My first option would be to bid reasonably using private money, then refinance. There are a few concerns though. The first being, the lien holder has a mortgage of over 200k with fees totaling over 300k for judgement amount. The house is worth roughly 185k. The title however is owned by a property management company, but the lien holder is the one getting foreclosed on. What are the odds the bank would accepting anything less than market value for this condo? From my research gathered, and multiple experienced investors iv'e spoken to, there is a high likely hood of the bank winning the auction then I can try to negotiate a REO shortly after. I am across the street from a rapidly growing university, with a hospital being built shortly. I currently have 3 roommates who would pay my entire mortgage/hoa. I believe this is a great way for me to start my house hacking journey, and i'd appreciate any feedback or advice.
One of two scenarios will happen:
1) the bank hasn’t researched the value and determined what they will be willing to let it go for...they’ll just set their max bid at the judgment amount.
2) the bas has researched the value and will set their max bid somewhere near market value..
You say the condo is “owned” my a management company. Was there an hoa foreclosure? If so, did the hoa get it back or did a third party buy it. Either way, there may be hoa debts still attached the condo that a buyer at the auction would inherit.
If the bank gets it back at auction, this hoa debt won’t go to the eventual reo buyer. If that happens, have an agent set up an mls search so you Immediately know when it gets listed..Then again, before that you’ll get the bank’s real estate agent offering you money to move. It is very unlikely they will let you remain even if you want to buy it after it becomes an reo..
I really appreciate the feedback. It is not an HOA foreclosure, it is a mortgage foreclosure. To my knowledge, they are up to date with the HOA payments.
I do have my license and will certainly be on top of it if/when it goes to a REO. I believe the management company quitclaimed it from mortgage holder a few years ago, and now own it.
Assuming the bank wins auction, do you think I will have any leverage negotiating a REO considering I am currently living in the house?
As I said, it is unlikely they will let you remain when they put it up for sale, even though you want to buy it. And yes, I understood this is a mtg foreclosure, just wondered how and to whom the title got transferred. I’m guessing the “management company” is just some investor who took it to strip the rents until the bank foreclosed.
If you are goin to bid at the auction somehow, Verify the hoa is up to date or not. If you need to buy it as a reo, start finding out which agents list this particular bank’s properties. Maybe, you could work out a deal to buy it without having to move but it would take some work as the banks usually won’t do that....they want a vacant unit sell with no holdover/eviction issues for the buyer.
Yes, I believe that the management company took over to collect rent until it got foreclosed on.
I will verify the HOA, i'll start doing my research on the REO agent. I appreciate the help!
Also, would the Protecting Tenants in Foreclosure Act help me out here if I have a lease that expires next May?
That fed Act expired a couple of years ago....90 days is the max protection in FL.
Oh Okay, I was just reading that it passed again 2 months ago, was wondering if that would be in effect.