All Forum Posts by: David Randolph

For investors who focus on distressed or foreclosure properties, how do you evaluate whether an auction property is worth bidding on? I’m interested in hearing what steps or criteria you prioritize before taking action.

Actually, Anwar, it really depends on where the auction is taking place, what kind of auction it is, and what type of property you are looking at. Each state has its own rules, different lien hierarchies, and its own way of treating debts, and even counties within the same state can have very different procedures. That's why the first step is always to understand exactly which auction you are dealing with. A mortgage foreclosure, for example, requires you to check every possible lien because many of them can survive the sale. With a tax deed, on the other hand, the main concern is municipal liens since mortgages are usually wiped out. HOA foreclosures are another situation altogether because mortgage liens typically remain. In contrast, private auctions can sometimes lead to a clean title transaction, though that still depends on the terms.

The type of property also plays a big role. In the case of condos, you need to be alert to HOA debts, upcoming special assessments, possible building violations, and any restrictions on ownership or rentals. With single-family homes, the issues are different, you carry the full burden of maintenance, so the physical condition of the house, along with any municipal violations, becomes a much bigger factor.

In the end, for me it always comes down to three essential considerations before bidding: understanding the market conditions surrounding the property, knowing which liens or debts you would inherit, and being clear about the physical condition of the property and the repair costs you might be facing. When you weigh all three together, you can decide whether the property is truly worth bidding on.

Foreclosure Rescue

• Mortgage: $385,000 [valued at 475-520]
• Seller walk-away: $10,000
• Wholesaler/Chris: $5,000 at close + $3,000 upfront consulting
• Rehab: $8,500 total ($3k upfront, $5.5k at close)
• Realtor commission: 6%
• Closing/title: 2%
• Monthly carrying costs: $3,000

🔑 Takeaways

• With 2 months hold, you’re fine at $475k+ (profit $13.5k–$55k).
• With 4 months hold, $475k is basically a wash; you need $485k+ to net five figures.
• With 6 months hold, you’re losing money below ~$490k. Only a $520k sale keeps it comfortably profitable.
• So your break-even zone is around $480k–$485k if it drags out.

✅ Bottom line: This deal works if:

1. You can keep days-on-market short (≤60 days), or
2. You can confidently list/sell at the high end ($495k–$510k+).

If it sits too long and sells toward the low end ($470s), you risk burning cash or barely breaking even.

I'm sitting on a house that I made the classic rookie blunder on - the first mortgage lien was NOT cleared when I bid the house at the HOA foreclosure auction. How fun. It's been 2 years and I got a place to live out of it.

However, the bank is now trying to foreclose again (was on hold due to original borrower's (previous owner's) military protections).

The borrowers are unresponsive.

I'd like to arrange a short sale but the bank/servicer (Rushmore) is telling me I'm not a successor of interest and that they need the borrowers signature for any short sale. However, online I'm seeing that this is legally possible without it, as I am in fact a successor of interest legally as I understand it.

1. Aside from getting a lawyer does anyone have experience with organizing a short sale without the borrowers siganture, using successor of interest alone?

2. I keep getting off handed suggestions to "work with the underwriter, they can do anything". So far the servicer acts like they've never heard the word "underwriter" in their life and have no idea who or what it is. Is this whole underwriter approach old info from a bygone time? I know things have changed a lot over the years. 

One thing I’ve noticed when talking to homeowners in pre-foreclosure: many wait until it’s almost too late before exploring their options. By the time they reach out, the auction date is often just weeks away.

Some reasons I’ve seen:

• Shame or embarrassment about falling behind

• Fear of scams or distrust of anyone offering help

• Confusion about the process and deadlines

• Hope that something will magically work itself out

For those who’ve worked with distressed homeowners:

• How do you approach these conversations in a way that builds trust?

• Have you found strategies that help owners take action sooner?

• Do you think there’s enough education out there about foreclosure timelines and options?

They're going to want to NET 84.05% of appraisal value. NET as in after all costs of sale. The lender will order an appraisal as part of the short sale approval process, which will likely come in at market value. 

I’ve noticed a lot of discussions here about buying foreclosure properties, and I think it’s worth clarifying something I’ve learned through experience: foreclosure rescue is not the same as investing in foreclosures.

When most people think “foreclosure,” they picture buying a distressed property at a discount — and that’s definitely one strategy. But foreclosure rescue often has a completely different goal: helping homeowners avoid losing their home whenever possible.

Sometimes that means buying the property, but not always. In many cases, it involves:

• Helping owners explore options like loan modifications, forbearance, or refinancing.

• Working with lenders to negotiate timelines or repayment structures.

• Educating homeowners on alternatives they might not even know exist.

From what I’ve seen, a lot of homeowners assume that talking to someone about foreclosure automatically means they’ll be forced to sell. But in reality, there are situations where they can stay in their home and get back on track financially.

I’m curious how others in the community view this.

Got it David, thanks for clarifying. Short sales sound like a smart way to cut down on competition, do you usually work them through agents or banks directly?