All Forum Posts by: Fernando Alonso

Hi Peter,

Actually, there was a mortgage with a $60k balance on the property, but I was aware of it and factored it into my bid. Between paying off the mortgage, the auction bid, and some other costs, my total outlay was around $200k for a property valued at about $260k, which I now have rented at $2,400/month.

As for the Clerk’s explanation, there really wasn’t one. When I didn’t get any response from them, I went down to the courthouse myself. Out of about 25 desks, not a single clerk was there; apparently, everyone was working from “home office.” The only person on site, the receptionist, simply acknowledged it was a clear mistake by the attorney, judge, and clerk. To resolve it, I had to file a court claim, which cost me another $2,000 in attorney fees. Just another example of the real costs of government inefficiency.

Hi Peter,

Absolutely, I can share a real-world example. Take a look at Miami-Dade Case 2015-011157-CA-01: in this case, the Certificate of Sale was issued two days after the auction, and the Certificate of Title wasn’t filed until 13 working days after the sale (April 13, 2023). This delay actually caused a major issue, the auction plaintiff tried to amend the final judgment amount, and by mistake, a new Final Judgment was entered for a future auction date after the 10-day window, but before the Certificate of Title was issued. Unfortunately, nobody, from the plaintiff’s attorney to the judge and the clerk, caught the error in time, resulting in significant costs and a lot of back-and-forth to resolve the problem. You’ll find all the details in the case docket.

Also, if you review random Certificates of Title in Miami-Dade for 2023 and 2024, you’ll notice similar delays cropping up, especially since the shift to more remote (“home office”) operations. These procedural inconsistencies have become quite frequent.

Hope this helps!

Indeed, Peter, that’s correct. Just a quick note from my experience in Florida:

1. While Florida Statutes apply statewide, not all counties follow the process to the letter. In busy counties like Miami-Dade, Broward, or Hillsborough, I’ve seen Certificates of Sale issued 3 days after the auction, and Certificates of Title delayed 4 days beyond the standard 10-day period. This can create tricky situations—especially if a redemption challenge comes up after the 10-day window (Where you are then undisputable legal owner) but before the title is issued.

2. You’re also right that objections require a valid legal basis. However, if someone files for redemption, the issuance of the title is automatically put on hold until the court resolves the matter. In some counties, this can mean unexpected delays and additional legal fees before you get access to the property.

Hi Isaiah,

Great question.

First off, it’s important to keep in mind that each state has its own foreclosure laws, and even within the same state, local procedures and timelines can vary depending on the county or the type of foreclosure (judicial, non-judicial, or tax-related).

Foreclosure investing can be a great niche, high returns and low risk if you conduct proper due diligence and understand the legal framework. But to do it successfully, it’s essential to focus on a specific market, study its behavior over time, and become familiar with its unique legal and operational processes. That’s how you reduce surprises.

As for redemption periods, yes, states like Iowa or Alabama have relatively long redemption periods, sometimes several years. During this time, the previous owner can redeem the property by repaying what you paid at auction (plus interest, fees, and sometimes penalties), meaning you wouldn’t receive full title or possession rights until the period expires.

By contrast, in a state like Florida, where I specialize, the redemption period after a foreclosure auction is only 10 days. Once those 10 days pass, the court issues a Certificate of Title, and the property is legally yours, free and clear of that redemption risk.

Hope this helps. 

Hi Michael,

Alabama has a unique feature when it comes to foreclosures — the statutory Right of Redemption, which can last up to 1 year after a mortgage foreclosure or 3 years in the case of a tax deed sale.

Now, here's the twist: even if the property was owned by an LLC and used as a rental investment, the right of redemption still applies, unless the entity expressly waived it in the loan documents (which is rare but worth checking).

To redeem, the former owner (in this case, the LLC) would have to:

-Pay the full foreclosure sale price

-Add 12% annual interest (at least as of 2024)

-Reimburse for any permanent improvements made

That last part is tricky, improvements must be professionally appraised, and it’s often a complex, costly process for the redeeming party.

Also interesting: property taxes paid by the purchaser during the redemption window are not reimbursed, as they're considered a benefit the interim owner received from the municipality.

Now, practically speaking? Redemption is rare in investment properties. If the prior owner couldn’t come up with enough to stop the auction (sometimes even 40–50% of the debt), it's highly unlikely they’ll have the liquidity to buy it back later, cash plus interest and improvements.

But there is a downside: Until the redemption period expires, the title is clouded — which means:

-You may not get title insurance

-Reselling it with a marketable title is tough

-Using it as collateral for financing could be limited

Hope it helps!

Hi Duncan,

So just to clarify: a short sale is a very specific situation that only applies when the homeowner owes more on the mortgage than the property is worth—what we call being “underwater.” In this case, the sale proceeds wouldn’t be enough to fully pay off the mortgage, so the bank has to pre-approve the offer before the sale can go through. That’s actually what defines a short sale: it’s not the discount or distress—it’s the fact that the lender must approve the deal, since they’re agreeing to take less than what they’re owed.

The bank usually agrees to this to avoid the longer, riskier, and more expensive foreclosure process. They’re basically cutting their losses. But if the homeowner still has equity—meaning the property is worth more than what they owe—they can sell it just like any other property, even if it’s already in preforeclosure. In that case, no bank approval is needed, and it’s not considered a short sale—it’s just a regular sale before the foreclosure auction.

And yes—even in a short sale, as long as the process is handled correctly and goes through a formal closing, the buyer typically receives a Warranty Deed free of liens, just like in a standard transaction. The lender releases the lien at closing once the approved amount is paid.

As for the resources you mentioned—definitely focus on ones that are specific to your state. Foreclosure laws, timelines, and even terminology can vary widely across states. You’ll find tons of general videos and books out there on general foreclosure investing, but they might not reflect your local process and may not be useful for you. Try searching for "NY preforeclosure process" or check your county court’s website—some even offer guides or step-by-step overviews that are surprisingly helpful.

Hola Santiago

Using an SBLOC—or any other pre-approved line of credit—is definitely a smart move in your situation. It lets you leverage your stock portfolio without liquidating, which makes sense if you're not sure you’ll win the bid. Just keep in mind: in most sheriff sales, you’re required to deposit the full amount (or at least a significant portion) within 24 hours of winning. So make absolutely sure the funds from your SBLOC can be drawn and transferred immediately—some lenders take longer than expected to release the funds, and that could put you in a tight spot if the auction terms are strict.

One more thing to consider: you mentioned the comps are around $500K, which sounds promising. But just a heads-up—the current real estate market is behaving a little oddly. Inventory is building up in a lot of areas, and many homes are sitting longer than usual. So if your plan involves flipping, you might want to think twice. It's not the best time to rely on a quick resale. Instead of looking only at listing prices, take a close look at actual closing prices and pay special attention to days on market, both for active and recently sold properties. That’ll give you a much clearer picture of what kind of exit strategy makes sense.

Mucha Suerte!!

Fernando

Hi Duncan,

Great to see your interest in preforeclosures—and you're right, it's an area that requires a bit of customization, which is why you won’t find too many calculators or tools that cover every scenario.

The reason is pretty straightforward: there are just too many variables involved. State laws and foreclosure processes vary widely, plus the foreclosure stage makes a big difference (preforeclosure, auction, REO, tax deed, etc.), not to mention property type. For example, condos often come with hidden HOA liens, while vacant lots or single-family homes may have city code violations or maintenance issues. A one-size-fits-all calculator would need to account for all of that, and realistically, if such a tool existed that could truly handle every situation, everyone would be investing in distressed properties instead of sticking with conventional deals.

Also, from a software developer’s point of view, creating a tool that works specifically for preforeclosures—just in a limited area like Westchester County, NY—probably isn’t commercially viable. The market’s just too niche for that level of specificity.

That said, in most preforeclosure situations, you're still dealing with a fairly standard real estate transaction. If you're buying directly from the owner before the auction, it's typically a conventional purchase involving a HUD-1 settlement statement and a Warranty Deed, where all liens and debts are settled at closing. So unless you're negotiating something unconventional—like a short sale or a Quit Claim Deed—there's not really much that needs to be "calculated" in the typical sense.

Hope it helps.

Fernando

Hi Aaron, great question.

The truth is, it’s not as straightforward as a 1-2-3 checklist—and that’s exactly why there’s such strong potential for returns in this space. You’ve got to understand a range of concepts that don’t apply in traditional real estate deals, and those can vary a lot depending on a few key things: which state you’re operating in (since laws and procedures differ), what stage of distress you're targeting (pre-foreclosure, auction, REO, tax deed, private sale), and even the type of property (condos tend to carry HOA risks, while single-family homes and vacant lots are more exposed to city code violations).

It might seem complicated at first glance, but once you wrap your head around the basics, it becomes much more manageable. I’ve actually written a short, plain-language book breaking it all down, specifically to make these concepts more accessible. I’m not here to promote anything publicly, but if you’re interested, feel free to send me a private message and I’d be happy to send you a free ebook version to help you get started.

Hi Aaron

Hi Ian, great question—and honestly, looking into pre-foreclosure is a smart move. It’s often one of the safest and most strategic ways to get a great deal, especially if you're aiming for a primary residence.

1) You’ve got a few viable routes here. Hard money is definitely one option, especially for short-term needs like this. You can use it to close on the property quickly, and then refinance into a conventional loan once the title is clean and everything is in your name. That’s a pretty common play.

Another option is to work directly with the current owner: sometimes, you can structure the deal where you cover just the foreclosure payoff with hard money, and have the seller carry the rest through short-term owner financing. If they’re in a tight spot and motivated to avoid foreclosure, they may be open to creative terms.

A third, lesser-known approach is to contact the foreclosing lender directly. In some cases, you can request to step in as the new borrower, basically asking them to rewrite the loan in your name. It’s not common, but it’s not unheard of—especially if the lender sees it as a clean exit from a problem asset.

2) This is something I’ve done for years—and with the right approach, it can work incredibly well. I've even written a book on it. The key is how you present yourself when dealing with the current owners.

Start by building a connection. Most people in foreclosure are already stressed and exhausted, and the last thing they want is another person in a suit trying to "offer help." Dress casually and blend in. Avoid coming off as wealthy or overly polished—no flashy cars, no big talk. Your goal is to be approachable and genuine.

When you meet the owner, listen more than you talk. Let them vent. It gives you insight, and more importantly, it helps them feel heard. Find something in common. If they’re Latino, speaking Spanish (if you're able) makes a big difference—it builds trust fast. And in some cases, it helps to have a woman initiate contact, especially if you’re aiming to present yourselves as a family looking for a home rather than investors. That often lowers their guard and creates a sense of comfort.

Body language matters too. Smile. Use their name. Make eye contact. Keep your posture relaxed and open—people pick up on those subtle cues, and it helps you come across as sincere and trustworthy.

When it comes to the actual negotiation, lead with empathy. Agree with their frustrations—about the bank, the system, whatever. Be someone who “gets it.” That alone can shift their whole attitude toward working with you. And when you make an offer, present yourself as someone who genuinely wants to help but has limited means. This justifies your price point and softens the negotiation. People are often more flexible when they believe you’re not trying to take advantage of them.

Best of luck, Ian. It really does work!