Foreclosure / Sheriff Sale-Is that a note as well?

[Mark Gruetzmacher]

Hey everyone,

I have been in the real estate game for awhile but mainly only do rentals.  As time goes by the idea of notes seems like a nice niche to look into.  The whole idea of getting started in notes is a bit confusing though.  Anyway I was wondering if buying a foreclosure at the court house steps was the same as buying a note.  From what I read , your are buying a note from the bank but it is also in foreclosure and you have to wait for the redemption period then the note turns into a deed to the property.  Is that correct?  I assume though that the whole idea of note buying it the cash flow so most note investors buy notes with the hopes of never foreclosing.  Thoughts?

[Edward B.]

@Mark Gruetzmacher, totally different. When a bank forecloses the property goes to auction to satisfy the note the bank holds. You are buying the property at auction and they use the proceeds from the auction sale to satisfy the liens against the property.

You can buy a note that is currently in foreclosure but that is different than buying property at auction. The redemption rules and periods are pretty much different for every state and there are usually ways around them if you know what you are doing. But the reality is that most people either can't redeem themselves or it just isn't worth it because they owe way more than the property is worth.

There are many different strategies used by note investors. Some buy cash flow, some buy and "rehab" the note, some use it to acquire property, etc., etc. Really depends on what your goals and expertise are.