How to Find and Buy a Foreclosed Home

foreclosures can be one of the best ways to get an incredible deal on a piece of real estate whether you plan to live in that property yourself or you plan to use it for an investment property for example this is a foreclosure that I bought and so is this one and this one and they're all awesome real estate deals but the world of buying foreclosed properties can get a little complicated it's filled with legal jargon and insider we'll call them secrets well my name is Brandon Turner the author of the book on rental property investing and the host of the top real estate podcast unearth the BiggerPockets podcast and in this video I want to walk you through the process you need to find and purchase foreclosed properties and hey if you liked this video and you want to see more like it be sure to click that little thumbs up button below the video tells the Internet that this is valuable and be sure to subscribe to the BiggerPockets Channel all right let's get on with it now I'm gonna divide or divide this video into three large chunks or sections first we're gonna get on the same page about water foreclosure is and isn't including the kind of the three different phases in which you could buy a foreclosure and second I'm gonna go and talk about the four different ways to find for different strategies for finding foreclosures and then I'm gonna walk you through the process of making an offer and making sure you end up with a killer good deal now before diving too deep into the details of how to buy it let's get all on the same page with the same terms all right a foreclosure is the process where the lien holder takes ownership of a property due to a variety of possible reasons but usually it's the lack of payment right you don't pay your bills you get foreclosed on the foreclosure process differs with every state but it generally begins with a bunch of notices are given to the property owner and then a legal set of steps leading up to actual foreclosure or carried out now there's generally three phases in the foreclosure process where it's possible to buy a property there's the pre foreclosure there's at the courthouse steps at the foreclosure and then after foreclosure so when learning how to buy foreclosure it's important to know what the three phases are so let me define each first there's the pre foreclosure phase now it is possible to buy a home before the foreclosure actually happens and the homeowner and before they're kicked out now buying a property dualist period is known as the pre-foreclosure and it's a common technique used by a lot of real estate investors and it can be a good way to find motivated sellers after all few things in life are more motivating for a homeowner than knowing they're soon going to be physically removed from their property next there is the actual foreclosure at the courthouse steps you see in most state states once the legal process has been carried out and the property is sent to the county for a public auction it's done on the courthouse steps like sometimes figuratively sometimes actual literally on the steps and it's sold to the highest bidder this process is known as the trustee sale the bidding generally opens with an automatic starting bid of whatever amount is owed on the property so no you're not gonna show up in a bid $1 on a property in and get it so whatever they owed on it is where the bid begins at for example if a home owner oh to $80,000 on a loan and the loans secured the property the bidding would start at 80,000 if no one bids any higher the lien holder will be awarded the property and be given the title so if nobody bids higher than 80 the bank's gonna take that back at 80 a couple of years ago I went to a courthouse steps auction and ended up winning this guy for just a buck over the opening bid was around fifteen thousand bucks because listen no one else showed up to the auction that was a good day all right now if you plan to buy a foreclosure at the courthouse steps here's a few tips to keep in mind when you buy on the courthouse steps there may be liens attached also you probably won't be able to see the inside of the property beforehand and the court usually requires all cash on the day you buy it so you can kind of rule out getting a loan on it you know this makes buying properties on the courthouse steps a more advanced and maybe risky strategy that I usually don't recommend for beginners but hey it works alright so we covered the pre foreclosure and the actual foreclosure on the courthouse steps the third and really honestly probably the most common phase that most people talk about when they talk about they bought a foreclosure that is the actual post foreclosure phase is the after the sale on the courthouse steps the new owner of the property probably the bank who lent on it unless somebody bids higher you know they're gonna have to evict the tenant probably the former homeowner who might still reside there now if it's a bank the bank will generally go through the process the victim the tenant get the home listed with a real estate agent to sell it the remainder of this article I'm gonna focus on how to buy foreclosure in this phase the post foreclosure after it's been filtered through the foreclosure process and is now available for sale publicly now when a bank takes back the property and begins to sell it the property is known as an REO or a real estate owned property now it's this type of real estate deal the REO properties that I want to spend a lot of time on because that's what most people talk about when they're saying foreclosure specifically let's talk about how to actually find these as well the most common source of finding foreclosures is through the Multiple Listing Service the MLS now the MLS is a collection of lists put together by local real estate agents of all the properties for sale in their office now in the old days these lists were actually kept in file cabinets and each office faxed them to each other and made a big list right but today we've got all the internet they got the internet so it's all kept there the MLS is fully accessible for any real estate agent so if you're not an agent you should need to either get an agent or you should become an agent right so the good thing is the real estate agent is typically paid for by the seller so it's free for you right because if you're buying it doesn't cost any money however you don't have to just rely on real estate agents to tell you what properties are listed you can actually get a lot of information online through a lot of different real estate portals like realtor.com red fin comm Zillow comm or Trulia com these sites will help you sift through nearly all the listings and give you at least some of the information about the property keep in mind however these lists can also be slightly delayed or outdated so in a hot market you could miss out on some deals if you're only relying on these real estate portals all right second you can buy re o--'s directly from a banks REO department banks typically have an REO department somebody that is in charge of working through those properties now I said earlier most REO is actually end up on the MLS but it is possible to make connections with an REO department at a bank and have access to properties before they put on the MLS this is especially true with smaller community banks and larger commercial properties alright third the HUD store you know some properties have been foreclosed on by the US housing of US Department of Housing and Urban Development which is HUD right if you get a HUD loan and you get foreclosed on a lot of times they're put on the MLS but a lot of times they're just privately listed on the HUD website at HUD home store com so be sure to check that out as well now the fourth way to find foreclosures foreclosure com so if we're closure dot-com is a website that you can find low price to stress to foreclosures like bank owned homes government foreclosures like Fannie Mae Freddie Mac HUD there's pre foreclosures on there there's REO properties and foreclosure auctions among other things so foreclosure calm curates them all through a membership on their site so if you're interested in that BiggerPockets actually has a partnership with them and we can give our viewers a 7-day free trial just go to BiggerPockets dot foreclosure com to start searching and check it out all right so now you have some tangible steps on where to find foreclosures the rest of this video is gonna go into some more detail on how to actually buy one of these properties and make sure you get a great deal so let's talk about putting in your offer once you find a property you want to buy it's time to submit your offer again this is what a good real estate agent comes in really handy typically you're gonna meet with your agent tell them like let them know the terms you want to offer how much when are you gonna close how you gonna finance it your agent will submit an offer to the seller and they'll look it over and then they got a few possibilities first they can accept it woo I could deny it oh they can ignore you if it's too low in other words denying or most common they could counter you they tell you now not that but how about this and many times if there's a lot of offers on a property the sellers gonna ask you to submit your highest and best offer in other words they're saying alright you know there's a lot of bidding here let's let's see what you got you know give us the most you can do now it's easy to fall into action mode and overpay when that happens because you allow the emotion to catch up with you but you know stick to the numbers keep the emotion out of it you know that really brings up a really really important point here just because something is a foreclosure does not mean it's a good deal in fact most of them are not so it's vital you learn how to analyze a real estate deal and know exactly how much you should pay for a property if you want some help with that be sure to check out the BiggerPockets analysis calculators you can analyze a real estate deal flip rental wholesale bur in under five minutes and even if you're brand new to this you can learn a ton so definitely check it out bigger pockets that column slash analysis all right moving on so let's say your offer gets accepted well now it's time to do your due diligence and make sure all your Ducks are in a row this is a time where you hire an inspector to check out the property use your financing fully in place and in most states the closing process is handled by a title company who's gonna prepare all the documents make sure the title is correct and arrange for the signing of all the parties however in some states an attorney is responsible for that your agent is going to know whether you're an attorney or a title company state all right after both parties have signed the document and the new deed has been recorded with the local county the property is now officially yours it's no longer foreclosure it's your property congratulations now if you like this video be sure to get that little thumbs up letting the internets know and of course subscribe to our channel here and lastly did you know that BiggerPockets is actually way more than just video content we're also the world's largest real estate investing forum millions of posts on their the lawyers will say investing blog over 20 posts every week Weavile world's largest real estate podcast with over 50 million downloads we're a social network with over a million members all learning how to use real estate to live an incredible life so I hope you check out the website and other resources as well create a free account today and start walking this journey together towards financial freedom for BiggerPockets calm my name is Brandon Turner sign enough [Music]

Channel: BiggerPockets

Views: 1,235,192

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Keywords: biggerpockets, real estate, real estate investing, investing, rentals, rental property, investing in real estate, income property, bigger pockets, passive income, Foreclosure, How to Buy a Foreclosure, Foreclosures, how to find foreclosed homes, how to find foreclosures, how to buy a foreclosure house, how to buy a foreclosed house, buying foreclosed homes, buying foreclosed homes at auction, finding foreclosures, foreclosure real estate, real estate foreclosure

Id: iELsGXx8y-o

Length: 10min 25sec (625 seconds)

Published: Wed Jul 11 2018