Purchasing Foreclosures through Sheriff's Sales in Minnesota

[Geoffrey Francis]

I am looking at purchasing a property in Minnesota at a Sheriff's Sale/Auction. The regulations for foreclosure sales in Minnesota seem to be quite different from surrounding states. I am looking for some feedback from someone that has done it before. I want to learn more about how redemption and evictions work in Minnesota, including the risks for buyers at Sheriff's Auctions. 

Many thanks for considering my ask!

[James Hamling]

@Geoffrey Francis what I can share on redemptions is from 1st hand account, on investing via purchasing at sheriff auction is 2nd hand accounts. 

I personally very much disliked buying at Sheriff Auction but my entry into the realm was doing redemptions, comparing the two the later held all the pro's with the former all the con's, in my mind. First and major item was someone could feel they snatched a great deal at sheriff auction, just to loose it to me 6 months later when I executed on redemption. I had a few threats of back-ally-dental-work in a few instances, lol. 

In redemption, I have had a opportunity to tour the property, inspect it thoroughly, get to know the residents, the history of property, I am knowledge loaded. In Sheriff Sale, I know an address, maybe got a look in some windows, maybe, the knowledge is extremally limited, I don't like variables. 

Now, the risks of redemptions are doing it wrong, it's very technical. When I first started in them we had 3 attorneys, yes a bit anal and we got it a lot more optimized but point is, very technical. The other con is you have to have a good $ partner or be $-loaded to float any posted cashiers checks that need be posted, any avenue of standard financing is off the table, even HM is going to probably be problematic. I personally had a private $ partner so I never had to try using HM so it may be possible but in my experience, I can see issues from doing such. 

Now, I know a couple very savy brokers, who went all in buying at sheriff sale and did fantastic at it. I also had a very close associate who did well on a few and then got stuck in one where for some freakish twist had his cashiers check, and the property, tied up for nearly 2 years before actually received the property, which had additionally degraded with the time, so reno costs inflated. Still exited profitably in end, but barely, with tons of stress. 

I would say a very key item is it's very heavy on detail and probably best suited for those with good command of law and with legal contacts and representations. I came into it with a contract law background with experience in interstate compact, my partner engineering, we were comfortable with digging deep into the law books and contract drafts. For redemptions we had nearly as much paperwork as a closing, lot's of disclosures and various contract construct. 

There also stands fundamental risks to both, such as knowing your market, knowing your inputs required for finished product, know the margins, know costs etc etc, and even then there is always inherent risk. 

I would suggest to find a great, not good, real estate attorney and invest in an hour or two to discuss the in's and out's of each.