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Sportin' Wood
09-04-2007, 12:55 PM
Anybody ever buy property down on the County court house steps?
Man there are so many houses with notices in my area, I'm gonna go down and check out a sale, just for an education if nothing else. Looked at one today that had a starting bid of about $47,000.... But it was a second and the same bank owned the 1st of $400,000 plus. I'm sure there must be a couple diamonds in the rough. That house was not worth $450,000 IMHO.
Any thoughts or advice.

MR.rvrluvr
09-04-2007, 12:57 PM
we are looking into the; same thimg.....I heard once it goes to auction and whatever the bid is........thats the sale price.....not a professional opinion tho just what I heard...

C-2
09-04-2007, 01:06 PM
A bank rep will be there to bid the amount due on their note if nobody else bids it. Of course, foreclosing on the Second makes ya responsible for the First, and evicting the people if occupied. No guarantee on title either, so you have to be careful.
The auctions are somewhat informal - and although suggested, Beanie type hats are not required (he's the auctioneer, and notice the nice podium, lol).
http://www.***boat.com/image_center/data/500/404294666_6de83ed0c7.jpg

C-2
09-04-2007, 01:12 PM
Almost forgot - on a 100% finance, 80/20 transaction, both loans have probably been sold, maybe multiple times. Sometimes, finding the owner of the second requires additional time.

cdog
09-04-2007, 01:12 PM
We just won a home at auction 2 months ago. It was an IRS sale in Dana Point. You must have cert. funds for 20% of the purchase price. I estimate the today price for the home at 650k, our winning bid was 532k.

C-2
09-04-2007, 01:15 PM
We just won a home at auction 2 months ago. It was an IRS sale in Dana Point. You must have cert. funds for 20% of the purchase price. I estimate the today price for the home at 650k, our winning bid was 532k.
Did ya find anything else worthwhile at the IRS sale?

GOTTBoat
09-04-2007, 01:20 PM
That is how I bought my first house on the court steps in San Barnardino in 94. I was looking to purchase the house before it went back to the bank so I had a little info on the house and was able to do an inspection the day before the auction. You never know what it's like inside on most of these. The private party that held a second was there but did not (or had no $ to) bid so they wached their 20k evaporate in about two min. the preceeding lasted.

Sportin' Wood
09-04-2007, 01:23 PM
I'm aware of buying the second and having to pop for the first, but if the first goes to auction don't the Jr. loans get washed?
I also thought you needed a cashiers check for the bid amount on the spot, in full. Yes/ no?
Everything I have looked at, the past owners have left so I'm not expecting to find eviction an issue. I would do a fair amount of research before going to a sale and would have a certain property in mind.
I have found a bit of entertainment in reading the public notice section of the paper lately and would like to see how it all works. You can't drive in any tract house project right now and not see a couple notices taped to doors.
Even with all the publicity on repos I still think they are a little high in most cases. The smokin deals are getting gobbled up some where. I'm just trying to find the early 90's style Rip the plumbing out smash all the glass and bust holes in the drywall repos. dead grass is not enough for me. I want it trashed.:D

cdog
09-04-2007, 01:27 PM
Did ya find anything else worthwhile at the IRS sale?
That was the only property being auctioned off that day at the OC santa ana court. Some others are done by silent bid.
87% of all trustee's sales are being returned to the lender due to being over encumbered. The opening bids on many are 5% more than they would list at in today’s market.

HokeySon
09-04-2007, 01:31 PM
we are looking into the; same thimg.....I heard once it goes to auction and whatever the bid is........thats the sale price.....not a professional opinion tho just what I heard...
not correct. C2 has it pretty much right (except technically you are not "responsible" for the first -- you take subject to it so you do have to pay it to avoid foreclosure of the first, but you are not techinically responsible for it personally).
Interesting that in the first example the same holder would foreclose on the second. They are obviously planning on taking the property back for the lesser loan amount. However, if the first is foreclosed, the junior is said to be "sold out" and potentially can obtain personal liability against the debtor. That is the usual situation.
I don't think there are many bargains to be had on the court house steps. In this market the 1st mortgage is likley to exceed the property value. Seems to me the deals are to be had before hand. Find a property with a seller financed second, with the first in default, purchase the second for a very small amount and step into the debtor's shoes on the first. Or find somebody that is already prepared to walk away and thinking about a short sell. I know there is someone on the boards who is into short sales, but I know a couple of ways to get the property without going through that process (but the value have to be right for them to make sense).
Anyway, I think the good deals must be made before the courthouse steps.
Oh and IRS lien auctions are a totally different animal -- the IRS lien wipes out the creditor liens . I have bought properties on governmental auctions and they can be good.

cdog
09-04-2007, 01:31 PM
Even with all the publicity on repos I still think they are a little high in most cases. The smokin deals are getting gobbled up some where. I'm just trying to find the early 90's style Rip the plumbing out smash all the glass and bust holes in the drywall repos. dead grass is not enough for me. I want it trashed.:D
6-12 more months.:)
Trustee's will be 100% cash on the spot.

C-2
09-04-2007, 01:33 PM
I'm aware of buying the second and having to pop for the first, but if the first goes to auction don't the Jr. loans get washed?
Correct, sans any government liens.
I read an interesting spin on Bush's bailout and forgiving the earned income tax credit on short sales/foreclosures - that it was done that way to accelerate the bottoming out on prices, to "hit bottom" quicker.

cdog
09-04-2007, 01:37 PM
I've found the best deals (for buyers) to be the REO's. I can get a buyer into a home in Serrano Heights in Orange for High 6's where that same home was going for low 8's just 1 year ago. The lenders know they have more coming down the pipe line.