Judicial Foreclosures in Oregon - How to get started

[Erik L.]

Hello all,

I am interested in investing in judicial foreclosures here in Oregon and I am wanting to learn as much as possible prior to bidding on one. 

I have read all the forum post related to foreclosures that I can find on here, and I guess I wanted to check my process and invite anyone else to give me advice.

The recommendations I have been given/ read most frequently are:

Have a title report performed as close to the date of sale as possible (2-3 days depending on how long your title company needs) 

Try to find a title company that is willing to sell you title insurance after a judicial foreclosure.

Perform extra searches yourself for any items that are excluded from the title report.

Calculate the expected value based on the best comps.

Drive by the property to get an idea of current condition. Most of the time you cannot enter/ walk around the property.

Calculate a max offer based on amount owed on liens, cost of rehab, closing costs, and with a margin for profit.

If you get the house and there is a tenant, you must honor the contract (if you are not living in it) up to one year. If the owner lives in it, it could take 90 days to evict them without a cash for keys type deal.

Does this all sound about right?

I guess a few questions that come to mind...

1) What percent of the time that the house is occupied do they leave without doing intentional damage?

2) How long after the auction can you start the eviction process? Like for instance you cannot leave from there to post a notice on the door, it takes a few days correct?

3) What type of title report do you all recommend? Stewart Title recommended a $250-300 product similar to an O&E "owner & encumbrance" report that they could then insure... does this sound good?

4) Following this process, what are the biggest hazards I would still be exposed to?

Thanks so much, I really appreciate all that you guys have put into this web page. It is amazing to have a resource like this to read through. It is hard to find books or other online material that is updated enough to rely on.

Regards,

Erik

[Erik L.]

Thanks for all the feedback! It was great to see all the new discussion and it was helpful for me to read through it.

I agree the Portland auctions are pretty saturated and they have lots of buyers present. One group I see pretty often are the Rain City guys who I believe buy on behalf of investors. Those investors pay them 12% for the capitol, so that is certainly not a cheap way to go about it. 

I have also been watching auctions in some of the surrounding counties and I would be happy to get something within one of the surrounding counties. I just want to get a few good deals a year to fix up and sell or rent out. The right of recession period is not great, but having to sit on it for 6 months would be fine for a good deal as a worst case scenario. 

I pulled title on a few deals coming up in the next month and I have a new question. In the title report there is a recently recorded "Memorandum of contract for purchase and sale". How do these affect a foreclosure proceeding? My understanding is that these are to cloud the title, would they actually carry through a foreclosure. After successfully winning an auction, what would I need to do to clear it? @Jay Hinrichs from reading through your other posts it sounds like you have lots of experience in Oregon, how do you work around/ with these in Oregon?

Thanks for the great conversation all.