Trying to Learn about Foreclosures

[Joel Douglass]

Good Morning, Fellow Bigger Pockets Members - 

I'm still somewhat new to the real estate game, and am looking at venturing into the (pre)foreclosure market. I am open to any and all advice. 

Two specific questions: 

1 - When you call out on these types of properties, what do you feel is best approach. I've researched, and there seems to be differences of opinions here.

* To tell the person you know they are in foreclosure and want to help them

* To avoid the foreclosure conversation and just ask if they are interested in selling their home

2 - Has anyone had success purchasing homes before they get auctioned off?

* I've called my local county/government  tax office, and they say that there isn't much I can do, the home is going to be auctioned off. 

Open to any and all advice, but those are my 2 specific questions. 

Thanks!

Joel

[Ryan Blake]

@Joel Douglass

1) I send out letters to people who have had foreclosure paperwork filed against them. I put in the letter, the foreclosure date, the deadline they have to respond to me where I could still help them, and what I offer (not cash but benefits of selling to me). I don't avoid the topic.

2) I don't know who told you that you can't do this in the county office. I can only assume that laws are not that drastically different from state to state (I know there is quite a bit of difference but not on the basic fundamentals). In Texas, when you show up to a county auction (held once a month) only about 30% of the homes that have paperwork filed to be sold on that day will actually be up on the chopping block. All the others have been struck off for one reason or another. Most of the time it is because the homeowners have delayed the process with a bankruptcy or other filing. Some will get current by catching up payments or by selling the house and paying off the mortgage altogether.

I bought a house two months ago where the guy called me on the Thursday night before the Tuesday morning auction. I was able to close the deal on Tuesday before the auction and wired the money to the mortgage company. Save the homeowner a costly foreclosure on his credit report and got the home for less than what it would have fetched on the auction block.

Now tax auctions are a different story. I believe if the tax customer becomes current, they can avoid the foreclosure just like with a lien holder foreclosure. The downside is that tax liens typically come with a lengthy right of redemption period (in Texas this is up to 2 years). You basically can't sell the house conventionally during this time because of that right of redemption.

Hope this clears some things up for you.