Newby...1st aquisition...maybe!

Hello all,

I am a new REI. I have been studying the subject on and off for about 5 years now. I have purchased several books and study packages. Including Calton Sheets. I also read several threads on this forum. Today, I won my first bid at a foreclosure auction. I’m one for one. And that’s scary! Read below and please offer any advice you may have.

I bidded on a property that foreclosed on the secong mortgage subject to the first. The first was estimated at about $64,000. I won it with only $22,000. Only $2000 over the starting bid. The ARV of the property is estimated at $140,000. I was able to see the property inside and out because tennants occupy it. No major repairs needed. I have a private investor/lender who has previously pledged
$120,000 balloon loan with interest only for 5 years. private investor seems flexible on terms. Tenants are paying $875.00.

Those are the facts. The Trustee said there will be a 40-50 day period
to ratify the deal then we close 10 days later.

  1. What should I be worried about?

  2. How can I find out who the first DOT is with?

  3. Can the current owner/landlord null and void this whole deal by paying off the second.

  4. The Trustee said legally I can possess the property but I shouldn’t spend money on it. I told him it’s being rented. He said I can’t start collecting rent yet. Why is he saying all of this, what can the current owner do to undo my aquisition.

  5. will I be responsible for any interest on either the first or the second between now and closing?

Thanks in advance.

Look at the redemption period in your state. This is how much time the person, being foreclosed on, has to pay the bank all the money due and get the property back. Good luck. Eddie

Thanks Eddie.

I will research that. I’m in Maryland. What is the usual redemption period in most states?

0-12 months; varies widely