Foreclosed but Owner still there !

9 Replies

Hello BP Family,

I am contemplating on buying a property that has been foreclosed on. However, the previous owners are still there! I have a few other foreclosed properties with tenants in them but the owner had vacated long before I purchased them. The bank has started the eviction process 3 MONTHS ago but will cease once the property is sold allowing the new buyer to continue the process. Does anyone have any advice on if I should move forward or let this one go?

Bank gets them out or don't move forward. Red flags are going up for you so you should pay attention to them. ...

I recommend you move forward with this (assuming the numbers make sense)

Check your state laws for what can be done in a situation like this, and ask local investors/agents for input on how to handle it - maybe a solution like cash for keys (where you talk the owner into moving out for $1000 or so)

Thanks for your suggestion Colleen I am in the process of a counter offer at this point suggesting tha

Updated about 4 years ago

@colleen f.

Originally posted by @Colleen F. :
Bank gets them out or don't move forward. Red flags are going up for you so you should pay attention to them. ...

Thanks Colleen, we countered and the bank declined on continuing the process once closed. They want me to continue this process on my own. The eviction could be a very long process especially if the owners are contesting this, right?

Originally posted by @Zaid R. :
I recommend you move forward with this (assuming the numbers make sense)

Check your state laws for what can be done in a situation like this, and ask local investors/agents for input on how to handle it - maybe a solution like cash for keys (where you talk the owner into moving out for $1000 or so)

Thanks Zaid, I am buying and holding right now and not too sure on this one. Owners have filed an answer with the courts and are definitely contesting this eviction. This could go on for a very long time .....

Sante in these situations IF, IF you take it on you reduce your offer heavily to the bank on the REO.

If the bank wants a premium and to dump a problem then move on to another property. Tell the listing broker to tell the asset manager that you are not dealing with a former holdover home owner tenant unless the price is really cheap.

The bank might just write off a bigger loss than wanting to deal with fighting a holdover tenant. If you are buying and holding you would just need to factor in a long time of no cash flow coming in. The other part is you can't just like a short sale accurately assess what kind of damage the outgoing tenant will do to a property if they are not out yet when buying.

Originally posted by @Joel Owens :
Sante in these situations IF, IF you take it on you reduce your offer heavily to the bank on the REO.

If the bank wants a premium and to dump a problem then move on to another property. Tell the listing broker to tell the asset manager that you are not dealing with a former holdover home owner tenant unless the price is really cheap.

The bank might just write off a bigger loss than wanting to deal with fighting a holdover tenant. If you are buying and holding you would just need to factor in a long time of no cash flow coming in. The other part is you can't just like a short sale accurately assess what kind of damage the outgoing tenant will do to a property if they are not out yet when buying.

Thanks Joel I cannot afford not having any cash flow on this property and frankly I don!t need the headach trying to get the owners out. Not to mention the costs I would incur. Im in this business to make money not lose money!

Get it cheap, go over there with your backhoe (everybody has a backhoe right?) and get careless working around the laterals for the utilities. Apologize a lot and tell them you'll fix it all back up as soon as you can scrape some money up. Go get some bottled water and one of those 88 dollar generators that are going on sale at Harbor Freight next week and drop it off to them (Just to be nice).

Check the local/state laws, contact an attorney prior to your closing.

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