I Won the Bid! Now What?

6 Replies

Hi all, I am a newbie and I know just enough to get myself in trouble. I just won a bid on a property from Ashland Auctions in Baltimore and not sure what to do next during the due diligence stage since it is currently occupied. It is a property that was foreclosed on. I plan to BRRRR. This will be my first project. It is certainly not a home run, but I am eager to get in the game and to start getting on base. I have so many questions. For instance:

  1. When we arrived at auction the tenant said his owner has cleared up all issues and that the house is not for sale. The auctioneer said that the owner was mistaken and the auction proceeded. I did a Maryland case search and it shows a close/inactive Foreclosure Rights of Redemption case closed 5/17/19. What does this mean for me? Do I have the right to purchase the property?
  2. How do I arrange access to property for my contractors prior to closing if the current owner is resistant?
  3. The last owner is obviously pretty upset to lose her home and lives right around the corner. Should I be in communication with her?
  4. What about her tenant? Should I be in communication with him? I did stop by today and spoke with him. He has kept the property in good shape and has been there for 30 years, but is only paying $200 a month plus utilities!! I’m not entering this business to displace people, but def can’t keep that rate for a 4bed 2 bath row home!

Thanks again for everything BP nation!

Originally posted by @Courtney Rollins :

Hi all, I am a newbie and I know just enough to get myself in trouble. I just won a bid on a property from Ashland Auctions in Baltimore and not sure what to do next during the due diligence stage since it is currently occupied. It is a property that was foreclosed on. I plan to BRRRR. This will be my first project. It is certainly not a home run, but I am eager to get in the game and to start getting on base. I have so many questions. For instance:

  1. When we arrived at auction the tenant said his owner has cleared up all issues and that the house is not for sale. The auctioneer said that the owner was mistaken and the auction proceeded. I did a Maryland case search and it shows a close/inactive Foreclosure Rights of Redemption case closed 5/17/19. What does this mean for me? Do I have the right to purchase the property?
  2. How do I arrange access to property for my contractors prior to closing if the current owner is resistant?
  3. The last owner is obviously pretty upset to lose her home and lives right around the corner. Should I be in communication with her?
  4. What about her tenant? Should I be in communication with him? I did stop by today and spoke with him. He has kept the property in good shape and has been there for 30 years, but is only paying $200 a month plus utilities!! I’m not entering this business to displace people, but def can’t keep that rate for a 4bed 2 bath row home!

Thanks again for everything BP nation!

Courtney,

A lot of these issues you're asking are legal in nature so I think it is worth talking to a real estate attorney licensed in your state. Having said that, in the states where I invest in, if the property is beyond the right of redemption, you can't redeem it by paying the back taxes but then again, each state has their own rules so ask a real estate attorney. 

Once you clear up that issue, you need to do a title search as well to be sure that there are no other liens or any claims on the property.

Once you did that, then you can proceed in taking ownership. That's the only time you can, in theory be in communication with the tenant. Then again, double check with your real estate attorney.

Hope this helps.

Sounds like the property was foreclosed and the previous owner’s redemption rights expires on 05/17.

You may not necessarily get access to the interior, unless the tenant agrees....play nice, but yeah, at $200/mo he’s got to go.

First of all there is usually not a due diligence period after an auction.. You bought it unless they can't give you clear title and even then you may have bought it anyway if they put in the ad they could transfer title via a quitclaim deed.   You don't have the right to enter the property prior to closing or anytime after closing unless you get permission from the tenant or evict the tenant.  Eviction can take months (like 4-8months)   are you talking about Baltimore city? or Baltimore County?    If you didn't get a "steal" on the house you may want hope they owner did redeem it and the auction company lets you out of the deal..  I doubt that this is the case.   If you want send me a PM withe address or the case number and I'll look up the docket and tell you what happened with the foreclosure case.

Ray