Foreclosed Property (Los Angeles: bank owned, real estate, foreclosures)

[bdesmit]

Because of the recent spike in foreclosed property, it seems that it's a good time to capitalize on future property acquisition. I don't know much about foreclosed property. Does anyone know a good place to research the potential in acquiring foreclosed property? Or does anyone know a bit about the subject. I'm recently out of graduate school and quake at the fact that every month about a grand of my money disappears. It would be so great to put that money toward a property investment, but don't think a traditional purchase plan woudl be feasible. Any suggestions???

[pgrit154]

I've looked into that myself with no luck. I likewise feel that throwing away a grand or more a month is too much wasted money. Anyone have any ideas?

[Angelrocks]

I think you might find preforclosures a good idea. I think there are a few sites on the web where they will list preforclosures and forclosures for a fee.

If you go to your local police station, I am sure they have a list of all the foreclosures, and I don't believe they charge anything. There is also another governmental agency that gives these addresses out for free. I'm just not sure which one it is.

What you may want to consider doing is buying a duplex. This way you can live in half of one of the building and rent out the other. It's not a bad idea.

I think for the amount of money real estate costs in CA...that would be your best bet. If you didn't have a "starter home" to sell, and use the equity as a down payment, this may really be your best best.

I am really good with money and from what I have noticed, home prices in CA are outrageous! Even if you took out a loan your looking at payments much larger than 1k a month. Your going to have property taxes, homeowners insurance and electricity, etc. It all adds up. If you were in an area where the homes were less expensive I would say, get your home asap. Cause it's better to get a piece of property for investment purposes. But, I don't want to see you shoveling money to a bank either.

You can try a site like www.foreclosure.com I could be wrong about that site, but I am sure they have sites that list forclosures and preforclosures on the web. If you purchased a forclosure your going to need to pay with cash. I don't even think your allowed to look inside the house either, till after you purchase.

That's how those auctions work. Now if you get a preforclosure deal your going to have to work out these details with the bank. I don't know how much you can actually finance, but I can find out. I have a good friend that specializes in preforclosures. She has bought millions of dollars worth of properties. I can ask her.

I am definitely sure that the foreclosure route will involve cash. How much cash do you have for a foreclosure?

It's also possible with preforclosures to find an actual buyer, while your the middleman. You can find a desperate seller, get a buyer and take a commission. Then when you get enough money you can put a nice down payment on a home. I always say it has to be at least 20%. This way your chances are much lower of going into foreclosure yourself. I hope this helps. I try to educate myself as much as possible regarding investments, but your going to need a good amount of money if you take the foreclosure route.


Edit: Well, I could be wrong about having to come up with the full amount. I was told that you need to purchase the full amount in cash...but when I look at that link I gave you, it says you can finance the forclosure. Check it out. Hope that helps!

[ferretkona]

I understand that buying a foreclosure is not as final as it seems. The previous owner usually has other debts borrowed against the property and the new buyer assumes all debts.

[MsV]

I'm thinking of moving from Central Jersey to northeast Florida - I'm on "Realtytrac.com" every day and it's most informative on how to use the site, as well as on giving you all the info you need about pre-foreclosures, foreclosures, bank owned properties and auctions. They will map out all properties under these headings with names and addresses. I just joined the site a couple months ago for $30, after taking advantage of their FREE 3-day trial offer. It's the best $ I've spent, as I can rule out this segment of the market. Also check out "forsalebyowner.com" and "craigslist.com". Lots of luck - there's a whole market out there that some people don't bother to monitor. Saving a realty fee is a big deal!

[ferretkona]

Originally Posted by MsV

,,,,It's the best $ I've spent, as I can rule out this segment of the market. Also check out "forsalebyowner.com" and "craigslist.com". Lots of luck - there's a whole market out there that some people don't bother to monitor. Saving a realty fee is a big deal!

So, just to be clear.
Do you? as well rule out the foreclosed properties as possible?

[Sorcerer68]

I monitor Craigslist almost daily. Sometimes you see forclosures. Be careful with FSBO properties because you may be facing a saavy seller who is in perfect position to *********, the unrepresented buyer. It costs you nothing to get a buyer's agent. Speaking of, if you find an agent who works with forclosures, they may be willing to subscribe you to whatever lists they get for free. My thing is buying fixers. Forclosures are often in need of love and I find this the quickest way to get equity. I don't limit myself to MLS or FSBO or Craigslist or whatever...I literally look everywhere....at all of them I look every day. This is how I make most of my money.

Pre-forclosures are often a wonderful opportunity because the seller is over a barrell and you can often get the property for whatever he owes...sometimes less. Sometimes the lender will agree to a "short pay". This is when it pays to be a shrewd negotiator or have one working for you.

When you have a forclosure, you're dealing with the lender. Usually they hire an agent to market the property for them. You can usually look on zillow.com and see how deep the bank is into the property and how much wiggle room there is. The fact is this: banks don't want to own property. In this market, you may find yourself in the position to make a ridiculous offer. Regarding how much to finance, I would never do something like put 20% down, I can use that money to leverage other property...but that makes some uncomfortable. For me, getting property for as little cash outlay as possible makes good sense. That said, I would NEVER purchase a turn-key property at anywhere close to market price with a LTV like that. I would be putting myself in a perilous position. It's all about the specific deal. That's why I always look for properties I believe are undervalued, if they have a recent appraisal substantially above the purchase price (which is EASY in the current market), we're in business.

Network with mortgage brokers. Some of them can throw you forclosures as well. A talented mortgage broker can change your life. There are also programs available for really, really sensational loans in "up and coming" areas...lots of things to make property more accessible that most people don't know about.

One final thought: echoing the above post, you can often purchase up to 4 units with a conventional mortgage. It's easier than most people think. Pick an area with good rents and 3 units (or less) can pay your mortgage! City of Los Angeles has Rent Control, make sure you look into it and it's ramifications if you buy in the city of L.A.

[judd_trichter]

i happen to know a broker who specializes in just such properties. his name is Sagiv Rosano and he's with Rosano Partners which is the hot new Real Estate Investment Brokerage Company making all the good deals in LA right now. You can check out their website at www.rosanopartners.com. Use my name if you like, the guy's an old friend!

-judd

[Twinkle Toes]

You might want to get a property while it is still at the default stage (when a desperate homeowner just wants to get the property off their back and salvage their credit) - when you can still get inside of the property to see what it looks like. Once it's in foreclosure you won't be able to get inside and the homeowner who is losing the property may have torn out any copper wiring inside the walls or ripped out the kitchen appliances and bathroom fixtures to sell for cash, or flooded the property or destroyed it in some other fashion just prior to the lender taking posession of it. People aren't happy when they lose their homes and a lot of them aren't going to voluntarily turn over what was once their property to the lender in pristine condition. Another thing is when you purchase a foreclosure at auction you need to have cashier's checks for the purchase and you had better do your research into ALL of the loans owed on the property as there will likely be a junior loan (or a few) in addition to the senior loan and perhaps IRS liens and various other liens against the property. Once you purchase that property those liens, loans, etc. become your responsibility. Check with some lenders in the area(s) you are interested in and find out which properties are in DEFAULT or search the public notices in the newspapers for the areas you are interested in. A title company will also have this info and you can also go to the county records office and research it yourself. You can get this info for free, and buying newspapers is cheap. Or you can pay for a service - they are pretty inexpensive too. Good luck, there are a LOT of these properties to choose from now!