Considering buying my first deal on the courthouse steps

Considering buying my first deal on the courthouse steps

Pat JacksonPro Member
Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes

I apologize if this should have started in the general discussion.

I live in Reno, NV but grew up in Missouri.  A house in a nearby town to my hometown is about to be auctioned off on the courthouse steps (literally).  

I'm interested in this property and have a few questions.

1.  From my initial conversation with a real estate agent in this small town, the house can be shown.  At a minimum I'll have my dad who lives nearby do a walk through.  Ideally I'd also have an inspection to know exactly what I'm getting into.  However the auction in 7/25, I don't think requesting an inspection and getting the report is a realistic scenario.  Is it?

2.  Being an auction property, I'll have a title search done for any outstanding liens.  I haven't made up my mind on which service to use, but is it a realistic scenario to get this report back in a week?  I believe it is. Does anyone have any recommendations on which title search company to use?

3.  I've never done this.  From what I've read, a cashiers check is required at the end of the auction.  I can have the funds all in one account in a week (the maximum amount I'm willing to bid based on what I find out about the property and the amount of risk I'm willing to take).  Can cashiers checks be filled out on the spot?  With an auction, obviously I won't know the exact price until it's over.  How have actual courthouse auction payments worked for others?  I intend to call the courthouse tomorrow, but wanted to double check here.

4.  My dad will be the one doing the bidding.  Should I have him do the bidding as my proxy, or have the funds in his name, get the house in his name, and transfer ownership to me at a later date?

I intend to wholesale or flip this house in a fairly short period of time if that matters.  Thanks a ton!

0Reply
13 views

Most Popular Reply

Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
9y

Make sure you are aware of the states redemption period.  In my state, it's generally about 6 months where the owner or lien holder can redeem.  Make sure you understand all the pieces that go with buying a foreclosure as there are lots of people that know the ins and outs of this and I'd hate to see you have your money tied up.  

See this reply in the discussion

13 Replies

Jump to latestLatest
  • Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
    9y

    Make sure you are aware of the states redemption period.  In my state, it's generally about 6 months where the owner or lien holder can redeem.  Make sure you understand all the pieces that go with buying a foreclosure as there are lots of people that know the ins and outs of this and I'd hate to see you have your money tied up.  

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    few tidbits.

    you make out your cashiers check to whatever trustee or auction company tells you to make it out to.. and you make it for 1 dollar over the opening bid.. then you make out a series of other cashiers checks up to the top dollar amount your going to bid... so when I bid I would usually make out the one check and say I would go 20k over minimum bid I would make out 4 5k checks.. the auction company or trustee will send you a refund if you over paid.. no biggee there.. you NEVER have the exact amount unless you get it for a dollar over.. which in a small town could happen in a big town if you get it for a dollar over then I usually get really worried that I missed something LOL.

    also keep in mind that 90% of auctions get called off at some point before the sale.

    If your being allowed to inspect it I would have to think this is a auction .com type sale not a true sheriffs sale ? is that correct.. I have never heard of a sheriffs sale were you could make appointments to view property.. but I have not bid in all 50 states so not sure there.. in the states I have bought in  about 11 of them. .the only way to view property was to break in or if the door was ajar just walk in.

    don't freak out about IRS liens those will sunset they NEVER redeem but if they do they owe you all your money back plus whatever U spend to secure it.. just don't rehab until you sure they are not going to redeem... I LOVE IRS liens amateurs are scared of them and those are usually my best deals.

    AS for pulling title your right should be pretty simple to have someone make sure your bidding on a first.. .

    good luck let us all know if you get your first one...

  • Pat JacksonPro Member
    OP
    Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
    9y

    @Bruce Runn  Much appreciated.  According to foreclosure.com, there is no right to redemption in Missouri.

    citation

    @Jay Hinrichs  Also much appreciated!  The process of multiple cashiers checks makes sense.  This sale is announced on auction.com, but a link is provided to the county courthouse.  It's a "sheriff's sale" as far as I can tell, though that's a new term recently added to my vocabulary.  That said it's a small town, everybody knows everybody.  I'll double check with the realtor tomorrow, perhaps I'm mistaken.

    There is a title company in the town, I'll likely have them do the title search unless either they're obscenely expensive or someone on here convinces me there's a better resource.

    Jay, I skipped from podcast 26 (I started at #1 and have been working my way upward) and just listened to #222.  Very interesting story.  I particularly enjoyed the timber portion.  When I was 10 or so I went fishing with my dad on a small lake on a farm in Missouri. He told me a story about how the farmer, soon after acquiring the farm had the timber cruised, marked, and sold off the veneer quality walnut logs.  My dad claimed this timber sale paid off the rest of the loan on the farm.  That story has always stuck with me, it's even part of the reason my bachelors degree is in Forestry. I'm now re-inspired to research the timber/property options out there.  Thanks.

    I will be sure to updated this discussion as this deal progresses.  I hope I have an exciting story.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Pat Jackson  If the 800,000 BP members had a clue about timber and would forget about rentals.. there would not be a tree standing in America  LOL... They did not call them Steel Barrons  Rail Barrons and Timber Barrons for nothing.

    Its not like it was in the Northwest when export logs were 1k per 1MBF but there are still those plays to be made all over the US.. take that degree and knock it out of the park. !!!   Let us know how you do on your foreclosure.

    Auction.com has moved into crying Sherriff sales by the way.. so I have seen that they are doing the Sherriff sales in AL for instance. at least in Birmingham .

    Also learn to run your own title or have your dad learn.. Too expensive to pay for title work because of all the starting and stopping in the foreclosure business.. now in a little town like what your describing it may be more of a sure thing.. but in Major metro areas you have to follow 20 to 50 properties to buy  ONE  so running 20 to 50 title reports is not feasible U need to be able to do this yourself.   At least that's how I set up my company.. But to be fair we had title co do these date downs for free for us.. but if they did not I would have had a gal at the court house doing it for me.. A Smart mom who wanted some extra work during the day type of thing.

  • Pat JacksonPro Member
    OP
    Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
    9y

    @Jay Hinrichs, I'm glad everyone doesn't know about timber!  I've always been interested in buying a piece of ground, logging it soon after acquisition and then:

    1. Selling it off.

    2. Renting it out for row crops, cattle pasture, or some other agriculture production endeavor.

    3. Leasing it out for hunting.  

    4. Taking advantage of CRP and several other federal conservation subsidies.  

    I'm going to have my old man go by the courthouse (no real website) and do a title search.  Shouldn't be too bad and he likes research.

    A question for Jay or whoever stumbles upon this.....I don't have to worry about property or title insurance until closing correct?  If I win the bid on Tuesday and a tornado demolishes it on Wednesday, that's not my problem is it?  I assume I get my funds back....but as the podcast says, "there's no such thing as a stupid question".

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    No you own the minute u hand over your funds.  

  • Pat JacksonPro Member
    OP
    Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
    9y

    @Jay Hinrichs, Holly Hannah!  I better have some insurance lined up then.  I'll call my insurance provider today.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    yup

  • Pat JacksonPro Member
    OP
    Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
    9y
    Just in case anyone is following this, after a visit to the courthouse today there are no additional liens on the property. It's been uninhabited for ~2 years. The roof has 2 layers of shingles, the second layer is somewhat old. I can't get into the house, my dad did a walk around today. Yard is mowed, window wells are filled with debris. May have caused windows in basement to leak. A realtor told me there is a bow in the foundation on the north side of the foundation.
  • Pat JacksonPro Member
    OP
    Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
    9y

    Here are some pictures from the walk around today. Chimney bricks are chipping fairly badly. Siding doesn't look awesome.  

  • Pat JacksonPro Member
    OP
    Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
    9y

    Here are some staged photos from when the house was on the market.

  • Pat JacksonPro Member
    OP
    Rental Property Investor · Reno, NV · Member since 2017 · 284 posts · 137 votes
    9y
    For anyone following, the house sold for 20k, which was above my risk threshold. It has has a second lien, which I found out last minute. So my dad just watched. The guy that bought it is local. His last remark was "I hope this works out". If I ever hear anything I'll update this again. Onto the next potential deal!
  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    I know some investors that do VERY WELL buying at the auctions.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.