Sheriff's Sale - Pros/Cons - Things to look for/watch out for?

Question

Quick background - I've got my feet off the ground with a few SFH/MFH rentals - stabilized for the most part but have good cash reserves. I'll finally have an office set up in my new house so I'll be able to better organize and expand. Starting to come across needing more/better deals. There's a few avenues for this - one being Sheriff's Sales.

I have yet to go to one - but I see some decent properties pop up.

So they are all (1) cash sales - I can just get a cashier's check or something from a HML and use that if I happen to buy a property from what I understand.

Other hurdle - (2) title. So the title is not guaranteed from what I understand - so I would need some sort of title insurance. I could get with a title company and get insurance for the properties I intend to make offers on

(3) Condition of property - obviously these are "As-Is" sales - so your offer price needs to reflect that the property may have some MAJOR issues.

I think the idea is a numbers game - makes lots of low/fair offers (ie: say no a lot) until you get a winner.

For those of you that use Sheriff's sales as a leads what do you look out for? Any tips/tricks you use? How do you personally like to come up with your max offer?

Sergey A. Petrov · Answer

You don’t get title insurance on a sheriff’s sale. You buy it as is subject to any and all senior lien holders. You do want to pay a title company to run a title report for you so you can see what issues exist before you go bidding your cash away. And yes these are as is

Jeremy Horton · Answer

Ok - easy enough. I'm trying to figure out the big catch on Sheriff's sales? I guess it's the lack of inspection...you can mitigate risk somewhat in your offer price. But this seems like a decent route to maybe pick up a property or 2 a year

Chris Seveney · Answer

@Jeremy Horton

Have a title company run reports, you can order reports also from a company like protitle USA

Jeremy Horton · Answer

@Chris Seveney

Gotcha - so we just need to have the title checked - then make sure we understand what we are reading on the report. I'm guessing a title company is the best place to go to run reports. So you can have an idea of the properties you want to buy (they are listed on the sheriffs sale website) then run a title report to see what is on the title.

That's the thing too - with no inspection, potential occupants, etc etc it makes sense to make sure your offer is low enough to offer plenty of upside

I see some places that look decent pop up in our area - just another potential way to find a deal I'm thinking

Chris Seveney · Answer

@Jeremy Horton

As mentioned you don’t get title insurance but definitely want to check title as is it a hoa lien or 2nd lien foreclosing and you would still have to pay the first off

We invest in notes and just had a junior lien foreclose and someone bought it, renovated the home and we filed foreclosure and now they are going apoplectic thinking it’s their house and they fixed it and don’t owe us $.

There is also huge risk in condition of house, as there could be 4’ of water in the basement. If Its Occupied you still need to evict.

Foreclosure sales are not something you bid aggressively on like I see people do with the rental calculators here on BP where they put best case scenario and have no upside

Sheriff's Sale - Pros/Cons - Things to look for/watch out for?

Sheriff's Sale - Pros/Cons - Things to look for/watch out for?

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