Clarification on Right of Redemption in Alabama
I'm hoping someone can clarify a scenario I am running into on a turnkey property in Birmingham, Alabama. I have bought two other properties from this seller and everything has been smooth sailing so far.
The third property I am currently "clear to close" on, but a Right of Redemption predicament just came up. The property was foreclosed on in August, 2015 so the one year redemption window does not come up for a few more months. The seller offered to pay for the cost of a redemption bond, but I am wondering how I would be impacted in the rare case that this property is redeemed?
I realize that the owner of the right of redemption would owe interest, taxes, insurance premiums, and necessary permanent improvements. However, would I end up losing a big chunk of money based on the profit margin of the turnkey seller? The property was foreclosed for $37K and I have a contract after full rehab for $70k. My estimate is that the turnkey provider has less than $60k invested including their rehab and holding costs. Do I stand to lose a portion of that difference?
- Dave