All Forum Posts by: Chris Martin

Technically, the bank isn't "bidding" anything. They are trying to recover their debt. If NJ is like NC, if the property doesn't sell at foreclosure, the bank gets a deed (special warantee or trustee deed) and then try (again) to recover via an REO sale. The details are in your state law.

Concerning your post: "Do they then relist the properties with a realtor, similar to the short sale process, at what they think is market value and try to sell all over again?" More or less. There are more technicalities in there, but from the outside looking in, basically that's it.

Realtors can (and do) bid at these auctions. Just don't do what brokers here did... collude with other brokers to rig the bids.

Aly L: This sounds like it will be a trustee sale. If Wachovia has both mortgages, it is most likely the opening bid will be the amount owed on the first mortgage/D-T (I'm assuming its a 1st D-T foreclosure, you should verify this.) Like Jon says, the bank may discount the opening bid to get buyers. I've bought property both ways... at current lien 'payoff' value and "discounted." Any more, the second position lien holder generally doesn't compete at sale, so you may see a good deal on some property, but probably not this one from what you've posted. But you never know anymore without asking. The auction is next week, so check with the trustee. And there may be other liens (RE taxes, etc.) attached.

Example of a trustee that provides better than average sale information: http://www.brockandscott.com/bs_foreclosure_properties.aspx

KKnack1010: The reality is a lot of investors get good cash flow tax deferred an some I know pay very little in current income tax. The game is to make your pre-depreciation income equal to your depreciation allowance. Net $0, tax wise, but they maintain good cash flow.

My email responses, if via my company or gmail, generally reference the company URL in the body. Not as much the method, but the content(person) behind the message. Kind of like having a visible profile here, I guess. There is something there or there isn't.

Like Mike said... but if you are putting in the effort and building your business, then of course it can pay. I project what will happen is that if you are successful, you will "graduate" to higher margin operations and start other profitable real estate activities.

I don't know where you are located, but true wholesaling is a tough business right now in most of the country.

Where I am, there are lots of good deals that don't require that level ($100K) of rehab. These properties are getting marked way down and are not turning over very quickly, if at all. I'm with Mike.... I'd rather get a new house for 50%-60% of "retail" sale, e.g. find a builder with aging inventory.

Have you tried marketing to first time home buyers? The big pluses right now are time and government incentives. They can move in and have time to work on closing the deal. Some sweat equity, some credit repair, maybe? Less stress than having a deadline, which is nice for them when their financing gets delayed for weeks or months at a time. The duplex should be Ok, as long as the condition doesn't cause appraisal issues when they execute the option.

Team up with a RE broker, mortgage broker, closing attorney and set it up so you and your team can walk the tenant through the whole process. I am assuming your goal is to actually sell the property (tenant executes the L/O) vs. generate bitter customers at the gain of a little extra revenue.

Saad said "I am not going to the auction, I can't afford it. I don't have cash for that." I would have recommended you go *without* any money or checks so that you can see the process. I guess you can got to another one... no shortage of foreclosure auctions.

My guess is that this is a second mortgage (80/20, or $400K/$80K) and would most likely make a very unwise investment.

I would also guess that the owner is/was still in denial. Owners in pre-forecosure (and foreclosure) are generally not very approachable. Your process for getting to the owner should be to get the foreclosure proceedings file, not by square footage and number of rooms. It is possible you called the wrong house/owner.

I think it's a good thing you listened to the prior poster's advice....

Jim says "Sheena, i would sell immediately for 240K, pay off your mortgage at 33K, stick 7 k in your pocket for a rainy day, and purchase 4 turn key duplexes(rehabbed with tenants and property management in place) for cash(50K each)."

There is no consideration for capital gains taxes and depreciation recapture? Do you assume tax deferred exchanges? If not, am I the only one paying taxes here?

Depreciation recapture is cumulative and I think there may be some capital gains.

William, I hope you hang on to these properties. HOA on new property isn't a "red flag" unless the HOA is grotesquely mismanaged. HOAs sometimes get services (trash, water, sewer, cable) at a fraction of retail cost. The cash flow looks good to me. Also, I hold property in LLCs (multi-manager) so I don't co-mingle member funds.

Douglas, you said about HOA "They can foreclose on you if you do not pay..." True of mortgages, too. With all due respect, why would you choose not pay HOA fees?