Hi Hannah,
Some answers to your questions.
1. A lot of people structure a payment option for residents to leave after the auction in the BS deed. so $500 non-refundable and $1,500 after we purchase at auction and another $2,000 when they leave the property after 30 days or whatever is agreed. We approach people by telling them we are bidding on the home and as if they need any financial help relocating and extra time in the property after the sale. If we can actually get the people to talk with us, we are usually successful. Most success comes a week within the sale. Yes it is dangerous. You are talking with people when they are most emotional and vulnerable. They can and do lash out occasionally. We've never had anyone be physical, but I always go with someone else never alone. You may also find that there are squatters at the home instead of the homeowner.
2. Any lawyer familiar with redemption rights can file the necessary paperwork to get an early deed. Just ask various lawyers in your area who practice property law. They should be able to file the paperwork for $500 to $1,000 per deed. You may need to wait 60 days for junior lien holders to redemption rights to default before you can get the early deed. Warning there are certain entities like the federal government that have more than 60 days. Or if a junior lienholder is not served notice of the foreclosure they may still have redemption rights and liens on the property even after a sheriff's deed is issued. You will want an attorney to look into these before bidding and soliciting redemption rights on the property.
3. There is no risk to you for recording redemption rights early. I like to record them because hopefully other investors know I have them and often won't bid on the property. Be careful when at the auction to be subtle when letting other investors know you have the rights as some counties will kick you out of the auction if they think you are intimidating people from bidding on the property. The liens never attach to you personally; they instead are linked with the property in an attempt to reclaim any of the debt when the property is sold.
Hannah, this is a very risky strategy. Large investors often lose money on this strategy but win out in the long run. The pendulum has swung back to having more properties foreclose via a trustee rather than judicial and we are finding in the tri county of Portland, there there are actually better deals at trustee sales and its easier to refinance. We bought about 1/3 of properties last year at Sheriff sales or about 10. This year I'd be surprised if we even buy 3 or 4 that way.
Good luck! It is a fun rabbit hole to learn about the redemption law, but may want to grab a mentor in your area to help you. I've seen someone lose 100k at a sheriff sale; they are not for the faint of heart.
