All Forum Posts by: Chris King

Quote from @Chris King:

I am wanting to purchase properties to flip at foreclosure auctions in my area. I have spoken to PML that fund flips and they aren’t sure how to lend for auctions. The issue is funds are due immediately after winning the auction in the form of a cashiers check. The auction price can vary, but I would have a max purchase price for a property beforehand. The deed takes up to 30 days to receive from the trustee. So no lien can be recorded until the deed is received. Anyone have experience with PML for auctions? 

YUP very easy work around for this but it does take a lender who will be a little less risk adverse than bigger HML that will simply say no title insurance no loan.. But this does and can happen.  Especially here in OR and WA.

I have done Private Money Loans on auctions in the past. I should preface this with, this is not an open door for me to loan, I do not offer my private money loans through this forum. I used my Self-Directed Retirement Accounts to loan on several sheriff sale auction properties in the past. I had  my borrower sign the promissory note and mortgage and then I went to the county recorder to record the mortgage. Likely best to have a real estate attorney handle this all for the private lender, unless they have experience or can navigate that process themselves. The attorney can assist with drafting the documents and recording the mortgage/deed of trust. 

Some private lenders are not willing to loan on auction properties, given the additional nuances and potential risk. 

You will likely need to come up with the 5% deposit required at the time of winning the auction on your own. If you have access to a line of credit on your primary home, that could be a good option. Alternatively, you could take a loan against your 401k for that initial amount.

Once you’ve secured the property and paid the 5%, you can then work with a private money lender (PML) to close on the property once the deed is ready.