All Forum Posts by: David Moore

No problem.  I did mix up my terms.  :)

@Albert Hoffman 

You are correct....the bank has the sherrif's certificate...had my terms mixed up. There is an excellent resource on the entire Minnesota foreclosure process available on the Minnesota REIA website. In fact, one of the big $$ guys I know is the president of the REIA, and might be a good resource, as he has handled every type of transaction before.

Ouch, thanks dude. I guess all that information I keep learning from those millionaire investors at my REIA meetings have got it all backwards. Thanks for setting the record straight.

I'm from Minnesota and have chased a few of these leads. The 3rd party buyer is a bank, and most likely, as is common here, the 3rd party bank is servicing the loan on behalf of the actual bank that owns the mortgage. Regardless of which bank now holds the note, at the end of the redemption period, it will be REO for some bank, at which time, they will likely call a hedge fund manager and say, "I've got another one for you". The unknowns are a big issue, which is why I recommended he check with his RE attorney. Yes, the owner can redeem by the end of the six months, and the way he redeems is by having this investor come along and buy it out for him. That is why the dates are so important here, and the guy bidding is concerned his contract cannot close on time. After the redemption period, the way four plexes sell here like hot cakes, I imagine this property will be REO, and go fast.

@Ryan Dossey makes strong points if the tenant is going to shape us as a long term tenant.  But based on her history, it doesn't sound like she ever has been one.  As in all cases, 'it depends' is the most reasonable answer. 

It is never too late to pull up that application and call previous landlords and ask questions about her tenancy. 

@Dawn Roof 

Hello.  I honestly looked at the photo and my eyes were drawn to how impressive the house looks...I mean the curb appeal is impressive.   

I'm surprised that no one answerd you with, "it depends".  What are the rents, how are the area schools, what are the crime rates in the area, and how many houses on this block are rentals?  Any realtor should know these answers within 15 minutes.   The house is turnkey by your description.  Try to overlook how nice it looks...this is difficult...and look purely at the numbers (we all struggle with this). 

Using Minnesota logic, If you are in an area where the rents are $1500.00 a month, with tenants paying utilities, some renters might balk at the yard.  But, if the average rent is $1500.00 a month, and you offer it at $1400.00 a month, the line out your door will negate it.  But remember, you are assuming it cannot be fixed before renting.  Once you get it, you need rental license inspections, and that can take a small amount of time, which you can use to get bids and fix it.  See, "it depends". 

Oh, and use that lawn to your advantage in getting the seller to help you with closing costs, or price adjustment. 

@Albert Hoffman 

I think I understand your situation. You are concerned your contract will not be executed in time before the 6 month redemption period ends. That is a concern. After the redemption period ends, the property will be an REO. Back at the sherrifs sale, a bank, likely the loan servicer or the bank who holds the note itself acquired the property. To buy this out of the redemption period, you would have to make sure all lien positions are cleared and the bank who now owns the house, would take the reduced payment you negotiated to settle their bank note.

I hate paying my real estate attorney, as she charges me $200.00 an hour, but in this case, I would call her if I were in your shoes.  I see a lot of unknowns here.    

I do know that after the redemption period ends, this property will be turned over to the bank REO department. I've heard recently at my REIA meeting that some banks just sell them outright to hedge funds, and they never see the MLS.

While I agree with @Anson Young  about just giving them a call, consider the service they provide for you.  I've found good realtors who understand investors tend to be investors themselves.  They don't bite, but a non-motivated one can cost you big.  I lost on a house purchase from a bank because the realtor was not willing to submit offers.  My current realtor, who is an investor, whom I learned about from other investors, put in a bid for me every day on a house for three weeks straight.  Got the house too.  

@Angela Henderson 

This is a very good question, and I've seen this discussed many times in these forums.  I've not yet run accross this in my screening, but the general consensus is that everyone screws up something in life, and since this one happened 17 years ago, then I would consider them as a renter.   Tenant screening is expensive, but the right tenant is worth it, right.  Do you have a system to check their credit?  Credit tells a strong story, in my opinion.  Also, does your state provide free criminal history checks like Minnesota does? (website). 

Hello Chris,

On our 2nd home investment, it needed a moderate rehab.  It needed a new roof and gutters, carpets, paint, windows, some doors, furnace, etc.  We contracted out the roof and gutters, furnace, and found a handyman friend who helped with some exterior siding problems, door repairs and we took care of exterior painting, plumbing (with help from our handyman), carpet, interior painting, and windows.  Stuff we knew, we did. 

It took way, way longer than I thought it would.  Our 3rd house required much, much less, because I'm passing on the huge rehab houses, and focusing on the low rehab, low time commitment.  The guys above hit the nail on the head.  You need time in this business.

I'm contracting out nearly everything on home 4 and 5.  I'd rather look for deals.