Negotiating judgements, Homestead, and Hoarder House

[Daniel W plummer]

Hi Everyone -

I may foolishly bid on a foreclosure from hell auction coming up in a week. It would be a BRRRR. This will be my first investment property in a long time.

ARV is $345k to $375k.

My max bid is $120k.

It would rent for $1700/month. Taxes are $480/month.

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It has 8 broken down vehicles in the front yard, junk filled swimming pool, junk in the yards.  Who knows what the inside is like, but I'm figuring 65K in repairs for a 3bd, 1.5ba, 1500 sq ft, with swimming pool.  Exterior is well taken care of.  Roof and foundation look good.   It is on a very nice street in a suburb outside of a major New England city.  It has curb appeal, but it is definitely the worst house in the neighborhood by far because of the trash.   Outside is cosmetic, with added hassle of dealing with DMV to remove vehicles.  Once that is done it will shine up really nice.   I can use my imagination for the inside.  But just maybe it is not that bad.  I can have my realtor look at it on the day of the auction, as I will be in Raleigh NC.

The title is clouded with 8 judgements from 4 creditors in 2011, and a homestead in 2016. 

I carefully checked every recorded document. There are no other issues on the title.

The document 'Title information' on auction.com does not mention the judgements or the homestead.

The mortgage company assigned it to a bad mortgage subsidiary in 2013.

Mortgage was $215k in 2003.

My plan is to have settlement agreements, paid out of escrow, before I try to get this property. 

It is brick 2 story with basement built in 1964.  There has been no permitted remodeling on it.  It looks all original from the outside, but it is in good shape from what I can see.

This is the 2nd foreclosure attempt it in the last 3 months.

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Here are 3 questions if anyone can answer any or all of them I will greatly appreciate it:

1) Has anyone successfully negotiated pennies on the dollar settlement on judgement debt clouding a title PRIOR to bidding on a foreclosure? 

2) What was your pennies on the dollar amount?   I think $.05 on the dollar is what I should offer.  

3) How can I legally approach the homeowner to ask how much does he need to remove his homestead?   What can I do if he is not cooperative or wants a large amount to buy him out?

And if you advise against this then that is OK too!  It may be foolish but there should not be much competition, except for the house rigged bidding.   I think there is an opportunity to buy really low if my foolish scenario can happen.   The auction just may call me back on my lower bid sometime later.   So tell me what you think....

Thank You

Daniel