by Wesley Barney, Real Estate Investor
Recently I participated in a Trustee Sale in Midwest, where I was the successful bidder with no competition and I purchased a single family home, market value $80,000 for (twenty one thousand four hundred dollars ($21,400.) unbelievable nobody showed-up! But the trustee and I.
This single-family house was occupied by tenant and the house was in fair condition, blue-collar neighborhood. I was fortunate enough to speak to the tenant prior to the trustee sale, and asked her did she know where the owner was? She informed me that the owner moved to Texas. Then I explained to her that this house is going to be sold at a foreclosure auction sale or trustee sale tomorrow, and I showed her the legal notice that was published in the local newspaper. By law all properties that are going to be sold at foreclosure sale, whether Trustee sale, or mortgage foreclosure sale must be advertised in newspaper of generally circulation. I continued to explain that if I am the successfully bidder, she could stay in the property and rent it out from my management company. I gave her my cell phone number to call me the next day to see if I was the successfully bidder and the rest is history.
When you attend a Trustee Sale, the person conducting the sale is called the trustee, and the sale is normally handled outside on the courthouse steps. There the trustee will read the legal notice or the terms of the sale. In order to participate in the trustee sales you must have all cash, certificate bank check or have capabilities to wire the funds to trustee “trust account” that day. The successful bidder will receive a receipt from the trustee, stating that he/she received funds from you. Later in the day you should be able to pick-up your “trustee deed” given you ownership to the property, free and clear. Once you receive the “trustee deed” you must record it at the county clerks office, and get insurance on the property.
Once you get ownership to the property there are a variety of Real Estate investment strategies that you can employ because the property is free and clear of all mortgages and liens. You can:
My investment strategy for this particular property was to refinance the property and cash out.
“IF YOU CAN’T FIND GOOD DEALS IN REAL ESTATE YOU CAN NOT MAKE ANY MONEY!"
Trustee Sales are different from Mortgage Foreclosure Sales. Trustee sales are non-judicial foreclosure sales. This means that it is not supervised by the court system. The sale is conducted by the “Trustee” who is the authorized person in charge. The trustee sale takes about 30 to 60 days to foreclose on the owner for non-payment of mortgage or loan.
The Mortgage Foreclosure Sales is the complete opposite. It is a judicial foreclosure, which is supervised by the court system. The judicial foreclosure process takes up to 12 months to two years. This depends on how back-up the courts are. Both types of procedures require the lender to follow strict rules and regulations.
Now, I have been investing in Real Estate for over fifteen years focusing on New York City foreclosure market and did very well. However, the market conditions change and Real Estate prices in New York City are sky high, making it a seller paradise. Which is all right if you are on the seller’s side of the market. Even at the foreclosure auction sales, investors/bidders are driving the prices past the appraised value and it is very competitive at the mortgage foreclosure sale. The average attendance is at least fifty people. This is why I decided to start investing out of state.
How would you like to participate in a foreclosure sale where only you and the trustee showed up as opposed to fifty investors? This was a valuable lesson that I have learned, you must think outside the box.
Should you have any questions, please send me an e-mail at barneywesley@.hotmail.com.