Can I purchase a property to wholesale that is to be auctioned off in two weeks at a county foreclosure auction. According to public record it is not bank owned
High level process overview:
Put the property under contract with the owner. Make 110% sure that you can complete the transaction (cash, HML, private investor).
Set up escrow, and have the title attorney find out the total payoff amount, and to whom it is owed. Make sure the title is good (sometimes foreclosures are done to fix title issues that cannot be fixed otherwise, or in lieu of a quiet title suit).
Close the property, best before the two weeks is up.
Wholesale it out.
Sometimes, if the property is under contract, the foreclosing entity will postpone the auction.
What happens if you don't close the deal at all or if the auction is postponed but you are able to close it one day later? What happens then?
One of our borrowers does this monthly and is making absurd amounts of money. Absurd.
Usually if you can show progress, the foreclosing entity (non government entities) will work with you. At some point, if they feel they are being strung along, they will tell you to get lost
If you are able to send them some money directly, then that buys you some time.
You want to be careful of not closing those types of deals without a really good reason. If you get a reputation for not closing, when you go to do more if them, you won't be taken seriously. Them the foreclosing entities won't work with you. They all talk and there aren't tons if them.
Examples of vaid reasons may include things like undisclosed or unobvious environmental issues, title issues/delays, government agency delays, original document delays and things that are out if your control.
For the record, delays in your financing ain't acceptable (within reason ok, but days not weeks) delays on the foreclosing entity side are always acceptable. Again, cash to the foreclosing entity will buy time.
Hope that helps!
James, thank you for your informative response. I really appreciate the assistance in helping me potentially see this deal into fruition.
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