Tips on Buying Bankruptcies

[Alex Farber]

Hello,

     Does anyone have experience buying a property that has had bankruptcy filed on it? There is a single family house in my market that I got an email about it being in bankruptcy. Is there an opportunity to buy it off market somehow similar to a foreclosure?

Any insights are greatly appreciated, thanks

Alex

[Chris Seveney]

Quote from @Alex Farber:

Hello,

     Does anyone have experience buying a property that has had bankruptcy filed on it? There is a single family house in my market that I got an email about it being in bankruptcy. Is there an opportunity to buy it off market somehow similar to a foreclosure?

Any insights are greatly appreciated, thanks

Alex

Few things about BK, 

1. If the borrower files bankruptcy, it is typically because they want to keep the home. If they did not want it, they typically will let it go to foreclosure. 

2. This does not necessarily mean they will not sell, but if it is in BK it would need to be approved by the trustee, and depending on the type of BK they filed and the size of the unsecured creditors the trustee would only allow it to sell to the public to get the best price because - they have to make sure they get what they can for unsecured creditors AND the trustee is paid based on what is sells for, so they will want it to sell for more.