Foreclosure Auction Due Diligence

[Walter Holmes]

Hi everyone,

I wanted to get some feedback from all new or even experienced Foreclosure Auction investors.

We all know the challenges and risks when attempting to buy an investment property at auction. So I've been working on a tool that not only automates this process but also builds the intelligence behind it.

The Relevant Information:

A summary report will be available for each property for the investor to examine all the gathered fields.

• Property Details
• Owner Information
• Tax Information
• Foreclosure Case Information
• Docket Entries
• Defendant Information
• Mortgage Position
• Liens
• Violations
• Open Permits

The Intelligence:

We created an easy to understand analysis that will give experienced and unexperienced investors a “birds eye’s view” of issues on any given listing using Icons, along with detailed explanations.

No issues Found:

Proceed With Caution:

STOP! Major Issue Found:

High-Risk Cancellation

Again, any thoughts and feedback are welcome! Thanks!

[Sean OToole]

@Walter Holmes, I've purchased 160 foreclosures, my customers tens of thousands. A lot of what you say makes sense, but the problem is that a lot of these deals don't make sense. By far my best deals are the ones where the initial look at the data was a NO GO. As a result, we long ago decided not to do any decision making, or even buy recommendations of the type you outline. Not only do I believe it will lead folks to miss deals, but likewise it may lure them to buy a bad deal. Sure you can find out about the sale, get the taxes, the liens, estimate values, pull in code enforcement, etc. But in reality that isn't close to all the data you really need to buy at auction imho. And even if it is it never completely eliminates risk.

Another concern I have about your proposed idea is that there can be big liability differences between being an information service, and an advisor. If your goal is to provide an online service, think carefully before touting your expertise at being the later. Definitely something to spend a lot of time and money with attorneys on. The legal costs of starting information services aren't trivial, and being an advisor is far thornier, and may even require licensing.

As for machine learning, artificial intelligence and APIs, note that they do not fix GIGO (garbage in, garbage out). That is the core problem with all of these AI real estate plays. The reality is that opendoor, zillow, etc are making some pretty poor purchase decisions, that a seasoned trustee sale investor wouldn't. They continue to throw large sums of money at the problem, but outside of getting the nation to tackle a wholesale redo of the public records system, I'm skeptical they'll ever reach the nirvana they proclaim is possible.

The problem isn't the analysis, it's the availability of data, and the accuracy of the data. So regardless of API's, ML, AI, etc, no one is going to perfectly solve this. The big boys are throwing hundreds of millions at it, so if I'm wrong, we'll know pretty soon.

Finally, if you really could solve this you'd be a moron to offer it as a service. Instead you should keep it for yourself and just use it as competitive advantage to buy everything. ;-)