Buying Foreclosures, best strategy

[Jacob Blake]

Hello All, 

My wife and I have decided to get in the real estate game and have recently began looking into foreclosures. I know it requires a lot of homework and due diligence.  Would it be wise to hire a real estate attorney for all of the “dirty” work?   What are some good foreclosure strategies?

[Ty Coutts]

Hey Jacob,

Hiring a real estate attorney can be a smart move, especially for navigating the legal complexities involved in purchasing foreclosed properties. They can help with title searches, ensuring all liens are cleared, and handling any legal issues that may arise during the process. However, it obviously comes with a fee. So consider your expenses! As for foreclosure strategies, thorough research is key. Look for properties with potential for value appreciation, understand local market conditions, and be prepared with financing options. Attending auctions, negotiating directly with banks, and exploring short sales are all viable strategies depending on your investment goals and risk tolerance. Another effective approach can be targeting pre-foreclosure properties where you negotiate directly with distressed homeowners before the property goes to auction. This allows for potentially lower purchase prices and more flexible terms. Hope this helps. Please feel free to reach out if you have any other questions, would like to discuss financing options, or if you need help analyzing some deals!

[Jacob Blake]

Thanks Ty! I am in Michigan, which has the 6-12 month redemption period after sheriffs sale.  Which is why I have been looking for vacant properties, but they are much harder to find in my area, Battle Creek.  Bob do you contact the home owner directly?  

[Chris Seveney]

@Jacob Blake

How do you define “dirty work”. Attorneys are not cheap. Are you having them find the foreclosure sales, running and evaluating title? If so you would be dropping $500-$1000 for every property that is in the mix which then figure out what your win rate is and it could be expensive.

[Drew Sygit]

@Jacob Blake what do you need an attorney to do?

[Hunter Stoudnour]

Hey Jacob,

A good real estate attorney is invaluable if you’re going to take on this venture. There is a lot of useful information and individuals right here from whom you might be able to gather most of what you need. However, a local attorney can provide insights into specific local real estate laws and ordinances. I would recommend contacting your local government and requesting a list of properties with back taxes, then start analyzing the areas where you think you can add value.

[Crystal Smith]

Quote from @Jacob Blake:

Hello All, 

My wife and I have decided to get in the real estate game and have recently began looking into foreclosures. I know it requires a lot of homework and due diligence.  Would it be wise to hire a real estate attorney for all of the “dirty” work?   What are some good foreclosure strategies?

 We have never used real estate attorney for dirty work regarding foreclosures or pre-foreclosures, other than to close the deal and/or deal with any issues that may come up in a contract.  On pre-foreclosures we have always dealt with the owner direct.  It it's a short sale that required us to deal with the bank we have dealt directly with the bank.  If it's an auction we have just dealt direct with the auctioneer.

Maybe on your first deal you have an attorney do what you call "dirty work" but the best way to learn is to deal with the owners directly yourself, get permission to deal with the bank and execute the transactions on your own. 

[Corby Goade]

Foreclosures are'nt what they used to be- many new investors think it's a fast track to an amazing deal. 

Many banks just hire a broker and sell their foreclosures off on the retail market like any other seller. 

As for auctions- now that there's HML and everyone and their mother thinks they are a real estate investor, auctions are mostly ridiculous. I see people pay OVER retail at auctions all of the time- sight unseen and as-is.

There's a possiblity to get a deal as a preforeclusure, but those are insanely competitive too. 

Deals come from LOTS of places, honestly, theyr'e all over the MLS in most markets. You just have to know how to recognize a deal and be willing and able to take fast, aggressive action, that's how you get the good stuff.

Best of luck!

[Kelsey VanSleen]

Quote from @Hunter Stoudnour:

Hey Jacob,

A good real estate attorney is invaluable if you’re going to take on this venture. There is a lot of useful information and individuals right here from whom you might be able to gather most of what you need. However, a local attorney can provide insights into specific local real estate laws and ordinances. I would recommend contacting your local government and requesting a list of properties with back taxes, then start analyzing the areas where you think you can add value.

 @Hunter Stoudnour do you take on the responsibility of said back taxes once you own the property? I'm new to this and find this strategy interesting. Appreciate your insights on this!

[Kelsey VanSleen]

Quote from @Ty Coutts:

Hey Jacob,

Hiring a real estate attorney can be a smart move, especially for navigating the legal complexities involved in purchasing foreclosed properties. They can help with title searches, ensuring all liens are cleared, and handling any legal issues that may arise during the process. However, it obviously comes with a fee. So consider your expenses! As for foreclosure strategies, thorough research is key. Look for properties with potential for value appreciation, understand local market conditions, and be prepared with financing options. Attending auctions, negotiating directly with banks, and exploring short sales are all viable strategies depending on your investment goals and risk tolerance. Another effective approach can be targeting pre-foreclosure properties where you negotiate directly with distressed homeowners before the property goes to auction. This allows for potentially lower purchase prices and more flexible terms. Hope this helps. Please feel free to reach out if you have any other questions, would like to discuss financing options, or if you need help analyzing some deals!

When hiring a RE attorney to help with the research you mentioned (title search, liens, etc) when starting out, would this be done before making an offer or a part of your due diligence while under contract? Appreciate your insights!

[Hunter Stoudnour]

@Kelsey VanSleen

For a tax deed sale, essentially you will bid to pay off the tax lien that was placed on the property and then you will inherit the rights to ownership of that property if you are the winner. Every county does this process slightly different so I would look into what your local area does.