Hi I have been lurking the forums for a little while and I feel as if it’s about time I get active. I am a young 21 year old who is highly motivated and interested in getting into the real estate field. Through other ventures I have raised a good bit of capital in which I plan to use a portion of to buy cash flowing properties. I only plan to begin actively pursuing this when I feel comfortable in the certainty of my knowledge on the subject. This brings me to my first question involving sheriff sales in my county. I looked up local sheriff sales and I was wondering how exactly they work.
For instance on the sheriff sale website there is a column titled “debt amount-All costs” where the debt amounts range from very minimal to extremely high. What exactly is this debt amount number? Is it the amount owed on the house or is it the amount the person is behind on their mortgage? If I wanted to purchase a property would this be the amount I would have to pay for the house? I don’t see how this would be the case when some of the numbers are under a few thousand.
When looking at the disposition on these foreclosures a majority end in the owner staying, with others resulting in different outcomes. For instance:
294 Properties as of Tuesday, November 13, 2007 @11:20:33 AM
–summary–
0 First Time For Sale
4 BANRUPTCIES
13 Bankruptcy Postponed to specified date
29 Postponed to specified date
22 Postponed by Court Order
166 STAYED
8 SOLD Consideration 3rd Party
0 Pending Sale
0 Postponed by Court Order Ind.
0 For Sale Add on
52 SOLD For Costs
0 SOLD Consideration Plantiff Attorney
0 Other
How do each of these outcomes come about?
As I am looking to buy multi unit rental properties I wonder if looking at foreclosed properties is the right approach. Is it wrong for me to think that if these properties are being foreclosed on then there isn’t something financially sound in their structure causing their owners to lose money?
I am not sure where you are from and every state and county is different with regard to sales at the court house steps. This can be a great place to pick up good deals but you really need to know what you are doing. There are generally a group of local people that specialize in these sales and it is often not a bad idea to spend some time at sales and see who is buying. Try speaking with them and see if you can get some info.
If you are looking to acquire rental properties you may also look at acquiring some homes in pre-foreclosure by bringing them current and purchasing subject to if the cash flow makes sense. The other area to seek properties is tired landlords. Not everyone is 21 and full of energy and a lot of landlords burn out. One good source of these is vacant homes with for rent signs and cold calling for rent ads.
There are lots of opportunities in real estate and you should spend some time learning the ropes. However, sometimes experience is the best teacher. I have seen loads of investors that habitually are getting ready to get ready and never do anything.
In Sheriff’s Sales, the All Costs relates to the back taxes, penalties, interest and foreclosure costs, UP TO THE DATE OF THE JUDGEMENT. The Judgement initiating the Sheriff’s Sale could have happened 2 or 3 years ago which means you have to confirm what is not included in the “All Costs” number mentioned because the Sheriff’s Sale only covers those taxes and penalties mentioned in the Judgement. You are liable for all other taxes. Also, that number is just the starting point for the auction. All mortgages liens would be quashed but there are 6 types of liens that could survive the Sheriff’s Sale and for which you would be liable. Also there is the Right of Redemption for the original owner which, in the case of a residential property in Texas, is 2 years.
Also, under the heading of “Life’s Lessons”, I wouldn’t start a post saying the you are young, brilliant, rich, and successful and then ask for help.