Foreclosure auction - worth bidding with many liens & inhabitants

[Dav Horn]

I am looking to dip my toe in the foreclosure market for the first time, and would like some help to clarify the many (sometime conflicting) inputs on the status of liens associated with a foreclosed property being sold at auction.

My interest in this property is two fold - I am out of state, but own I piece of property close to the foreclosure.  The objective is to fix up the foreclosure property and flip it (or rent) and also use it as a base to develop my current piece of property to become my permanent home.

The foreclosure estimated price is about $450,000.  I am guessing the market price for the fixed up house is about $600,000.

The foreclosure property is complicated.

There are approximately 25+ liens on it, with multiple mortgages, HOA, local property taxes, and federal taxes. I have spoken to the county clerk as well as the trustee, but neither of them can or have provided much information. I have reached out to the owners to buy it from them, but have not gotten any responses.

On top of the lien, it is my understanding that the house is still occupied.

Questions:

What liens stay and what liens go with a foreclosure? It is my understanding that the HOA stay & the federal tax go after a buyout period. What about local taxes and other mortgages? How to fined out if the foreclosure is by the primary or junior mortgage lender? Does it matter?

How much does eviction usually cost if that is required?

What is the thought process around discounting for the lien risk?

Is it better to wait and assume that it will not sell, and buy from the bank at REO?

What is the best way to get in touch with the bank to make an offer on the property - will the trustee provide that information at that point?

Would a title company or real estate attorney help with this process?

Thanks to everyone reading this and commenting - it would be about $1k to travel out for the auction, so I want to avoid that if it is a waste of time and money (and health) flying out to the auction.  

Thanks,

David

[Ron S.]

What liens stay? It depends on who is foreclosing. Any lien behind the foreclosing entity will get wiped out, absent property taxes, sometimes some HOA's, and sometimes some utility liens. Even the Federal tax liens will sunset and expire at about 120 days after the foreclosure sale. It matters very much if its the junior or senior foreclosing. just google or search, "I bid and got the junior lien at foreclosure sale now what".

Eviction costs depend and vary. Cash for keys is usually cheaper in the long run.

Discounting for lien risk is a futile effort. Don't risk anything, find out exactly what the liens are, what the priority of liens are, and what will get wiped out (Title company can help with that. Attorney can help with that).

Is it better to wait? Depends. If you wait until REO, you'll pay full retail and compete with everyone as the property will be listed with an agent (Always). If you bid at foreclosure, you might still pay full retail but you'll only compete with those that have pockets as deep or deeper than you.

You don't get to "get in touch with the bank to make an offer". They don't own it. If they did own it, still wouldn't talk to you. 

What state is this property in?