Hey Everyone,
I’m new to the forum and am new to Real Estate Investing. I do have the ability to purchase with cash an average house in my area in Missouri. The market is incredibly hot in this area and there aren’t that many great buys on the MLS and if there are they are going into multiple offers driving the price up. As a result, I’ve been looking at Trustee’s Sales (auctions). I have been to several auctions (there are usually three a week on the courthouse steps) and have some general questions about them. I know the basics of how to look up the information with my county’s assesors office and the recorder of deeds. I know how to check for tax liens against the individual as well. I am able to run comps on the property because my business partner is a licensed realtor so he has access to the MLS. Where I get a bit apprehensive is that these auctions are to satisfy the debt of the of the trustee against the property, and is subject to all prior easements, restrictions, covenants and encumbrances, if any by the debtor. I don’t know exactly what these could be or how to look them up. Also would there be any other reservations I should have when purchasing a property in this matter?
I have an attorney but he has reffered me to another attorney who specializes in real estate and I can’t get in to speak with him for another couple of weeks. Any help would be much appreciated!
Howdy Mo:
The main concern in liens and encumbrances. A good title company will do the work for you. You can also find help at the courthouse. Most easements are not a problem as they were given for utilities etc years ago and should not present a problem as long as a structure is not built on them. Other reservations may be minerals but very rare in residential investments. Restrictions of use may also be put on property by the original developer or by deed. Most of theses too are in line with the use of the property. o one wants a hog farm in their back yard. Hope this helps a bit.
Thanks TedJr! I will find help at the courthouse most likely. They require a 10% cash down payment within 24 hours of the auction and that is non-refundable. The remainder is due within 30 days or they will re-bid the property. So I need to make sure I know these things prior to bidding. Do you mean a title company will do most of the work for you when you go to close on the property? or can you get help from them prior to the auction? thanks!
Do you mean a title company will do most of the work for you when you go to close on the property?
The title company will do all of the work for you when it comes time to close.
Your primary responsibility is to obtain financing. The title company will then correlate the sale with the Lender, Seller, and you.
Your primary responsibility is to obtain financing.
As mentioned before I have the cash on hand to purchase the property in full so I would not need financing.
Has anyone had a lot of luck with Trustee’s Sales??? If so, what was your approach and what types of properties do you usually target? Thanks for the help!
As mentioned before I have the cash on hand to purchase the property in full so I would not need financing.
Then you would simply skip that step. Find a Title Company. 
The single largest issue you face is finding out how much, if any, the liens against the property represent. If the property was mortgaged at 100%, then it will be difficult to purchase a property enough below market price to make a profit. Sometimes it is difficult or impossible to even find out who the lienholder is, much less the amount involved.
Try to determine if there is a minimum bid on the property before going in. In this area (Dallas) the constable handles courthouse auctions and their office is usually pretty helpful. We’ve done a couple of these and the ladies in the office are very nice ($2 for a dozen donuts works wonders).