All Forum Posts by: Marty Boardman

NY is a judicial state, so the lender must take the borrower to court to foreclose. When the bank files their notice a judgment is issued and the amount owed at that time is listed on the notice. However, the monthly payments, interest, late penalties, taxes and legal fees continue to add up until the day of the auction. In Wisconsin (also a judicial state) I've seen the the opening bid be set 15-20K or higher than the original judgment amount because it took an additional 6-8 months for the auction to take place.

This is called a "drop bid". The lender does this because they want to entice third-parties to bid and if they don't "drop" the amount owed they'll end up with the asset. This happened a lot where I'm at in Arizona after the housing market crashed. I actually bought about 20 properties in Wisconsin at Sheriff's sales the past two years that were drop bids.

It's smart to do your homework on the properties that appear to be underwater prior to the auction (title check, comps). If the bank does a "drop bid" the day before the auction, or the day of, you'll be prepared. A lot of investors don't know that banks do this and miss out.

Sure no problem!

I live in Phoenix and have been fixing and flipping/buying and holding in Milwaukee since 2012. Since that time I've hired/fired 5 general contractors and sued one of them for 120K (and only got 10K back).

Needless to say, I got sick of all this drama so I hired a project manager instead, and now I pay for my own materials and pay the sub-contractors directly. The project manager gets paid for scheduling and keeping the project moving forward. This gives me a lot more control over the timeline/budget.

The project manager also helps me find new trades because they constantly come and go. It's like being the GM of an NFL team, once players get really good they want more money and become unaffordable.

You can build a reliable rehab team in another market, but it will take time (and require you go there at least 1-2 times a month on your first couple of flips). By doing this you build trust (not just with contractors but anyone else you need on your team like Realtors, title reps, home inspectors).

As @Patricia Steiner pointed out, it's unlikely a pro is going to hand over their best contacts to you if they're already running a successful business.

Good luck Justin!

There is never a wrong time to fix and flip houses, only a wrong way. 

When the housing market is strong, it's difficult to find deals with enough margin to make a profit, but easy to sell them when the rehab is done.

When the housing market is weak, it's easier to find deals with enough margin to make a profit, but difficult to find a buyer when the rehab is done.

You can forecast longer hold times, a 5-10% decline in pricing and higher labor/material costs into your offers. As long as you buy the right way you can make money in ANY market.

I agree 2023 will be nothing like 2008. That said, there is plenty of data to support a surge in foreclosures this year. ATTOM Data Solutions just published this report that states "U.S. Foreclosure Completions Increase Annually by 64 Percent in November 2022" and that "foreclosure activity remains up 57% from last year". The highest rates were in Illinois, Delaware and New Jersey.

Link to article: https://www.attomdata.com/news...

You can make an argument that not many of these properties will end up in the hands of the bank as REOs. But there's still a huge opportunity here with the right strategy with pre-foreclosures and at the auction (sheriff's sale or trustee's sale).

 You search for notice of trustee's sales at the Dallas County courthouse. They publish these notices online. Here's the link: https://www.dallascounty.org/g...

 You're welcome!

If the bank owns the house it's not in foreclosure anymore. It's an REO (real-estate owned). And if the lender foreclosed on the property a few years ago, but still hasn't tried to sell it, then it could be because there's an issue with title, or perhaps there's a legal battle taking place with the previous owner. The bottom line is you can't make a seller sell, even when it's a bank. Most banks want to dispose of non-performing assets quickly, and will do so by selling at a public online auction like Auction.com, or list the property with a local Realtor on the MLS.

Even if you can work your way up to the bank's decision-maker on this property, it's highly unlikely they will sell directly to you. They will want to expose the property to the entire market to get a highest and best price.

Rather than doing this I would focus your efforts on finding pre-foreclosure deals. This is a much more effective approach to finding below-market deals, especially as a new investor.

Good luck Shenell!