Redemption period questions

[Ben Boru]

So in Michigan we have a 6 month redemption period. If I'm understanding this right it's 6 months from home auction date. Meaning you could buy the home and not be able to touch it for 6 months. In todays economy that could be a very big deal.  

How do I make sure that when I buy the home I can take ownership relatively quickly and avoid tying up money into something I can't touch for 6 months? Given the redemption period should I try to buy homes 5 months post-auction instead on pre auction? 

[Joshua B.]

Quote from @Drew Sygit:

@Ben Boru

How would you, "buy homes 5 months post-auction instead on pre auction"?

In Michigan, you buy foreclosed properties at a courthouse Sheriff Sale. PERIOD.

The owner then has 6 months to redeem their property and pay off what the buyer paid at the auction + interest.

There are only two ways to shorten the 6-month redemption period:

1) If you can satisfactorily prove the property is not occupied
2) If you can negotiate with the owner to assign their interests to you

You could buy a foreclosed property post-auction, but you'd have to negotiate with the winning bidder to buy their interests.

FYI - there are also conditions under which a property may qualify for a 12-month redemption period.

Are you sure about that? What's to stop an investor from purchasing redemption rights during the redemption period and then buying out the winning bidder? I looked into doing that a few years ago and I seem to recall that's permissible. No reason why it wouldn't be that I can think of.

For instance, let's say a home is foreclosed and the winning bidder pays $100k. The market value of the property, though, is $150k. During the redemption period, you could offer the homeowner $20k for the redemption rights and then redeem the property by paying the winning bidder $100k. Property becomes yours and you have $30k in equity.