Knowing How To Bid At Sheriff Sale or Auction

welcome back to floss slaw I want to do a follow-up of the videos we started yesterday talking about auctions the first video we dealt with exclusively auction calm because it is such a popular platform right now at least in Chicagoland area and because it really gives you a lot of information you can see a limited description of the property a lot of times they have some pictures of the property you can do some research on the property too so it gives you a much more ability to know what you're bidding on today we're going to talk about auctions a regular auction either whether it's at the sheriff's office we like they do up in Lake County it's at the courthouse or if there's a third party company handling it like a judicial sales court or someone else that you're gonna go to that's going to be an auction provider when you're talking about doing these type of properties it's on you as the buyer to do really all of the research part of the reason auction comments become so popular is they do give you some information to go on when you're going to just a regular judicial or sheriff sale there's nothing to go on all you have is an address and maybe a rough idea of what they might put the property up for bid but you don't know until the bit starts so it's on you to figure out you know you'll have an address okay what is that properties at a condo is that a house is it a two flat there's anyone in the property what's the condition of the property is there any issues that we need to know about in the area that are going on it's up to you to do all that so there's a lot of research there's a lot of legwork involved with going to do an auction at the sheriff sale it's really all on you because if you've been on their property and you win it you're stuck with it now for better or for worse and you don't want to get stuck with the worst because in this scenario the worst can be pretty bad the worst horror story I've ever heard many many years ago with some of the drill by property thought it looked really good I thought they got the deal of the century went back and the entire back of the house was gone had burnt in a fire it was basically a like a dollhouse front there was nothing in the back everything was gone so that that's the worst-case scenario obviously you want to try to drive by the properties as much as possible check on the condition of the property see whether it looks like anyone's in there or not you know a lot of people poke through the windows do that type of thing don't get yourself in a situation where there's an altercation but Jeff I check out the property you want to know what wait what is your bidding up every day every day even with the economy improving every day there's at least a couple dozen properties that are up for auction somewhere in your general area it's just you have to figure out where they're at where they conducted at and get the list of what the address of the properties are so when you're evaluating that many properties it can get very exhausting very quickly so the first thing if you're going to start looking at doing auctions is figure out what's a within your bandwidth and be how you're going to handle the research part of it because like I said it's critical for you to do the research going in you can't blind bid on these things you're gonna get stuck with some really really bad properties so figure out how you're gonna handle that whether you have a team whether you have a system or you're gonna do it yourself but you're gonna need to have the channels of a team building to give you that information you're going to need if you talk to top comp a style company sometimes will give you sort of a snapshot report on the properties that's possible where you can work that out with them or you can give them the list of properties and they'll give you not another title commitment but they'll give you an idea of what liens or anything they could see that's on the property so you can do that for one if you have a good real estate attorney you're working with they can kind of help you out with that to look and see if they can find any liens on the property I do that I got pretty good clients that call me say hey there's a really good property that I found can you check it out I usually check to see if there's any municipal liens down there with status of the mortgages stuff like that not hard to do it's not terribly hard on an individual property it's not terribly hard again the hard part comes in when you're doing 20 of these a day I can get exhausting it that becomes a lot of work with the volume that's involved if you're looking at one it's not too bad doesn't take too long but when you're talking about evaluating a high number of them every day that's when it becomes difficult that's when it becomes very difficult yep you get worn out very quickly people people that try to execute this strategy feel very positive going into it and they can get burnt out by it very quickly so you need to have a pretty solid strategy going in am I going to focus on little condos that I can pick off am I going to focus on just two flats and we're gonna focus on single-family homes that I think I can flip or single-family homes that think I can rent out um try to create a niche for yourself because if you're just evaluating Oh any property I think I can make money on you're gonna get worn out real fast so narrow down your search focus what what are you in this to do and not just make money what type of property you're trying to find what are you trying to do by going this way so when you so if you've identified a couple properties that are up for auction tomorrow contact your attorney maybe you have contacted the title company you've checked the liens all the mortgages because it's part of a foreclosure process now we're talking about Illinois Cook County area Lake County DuPage County well Counting okay that follows a judicial process for foreclosing on properties so all the liens are going to be potentially cleared off of there because the foreclosure is gonna handle that now you're gonna want to check the foreclosure case to make sure that everything is being handled properly a lot of times I go through and just kind of double-check everything we'll get into that maybe a little bit of a different video of making sure that they named all the properties as defendants so you can remove them from the property if you need to if they haven't named in the in the foreclosure proceeding all the parties that are in then you don't have a court order to remove everyone from the property now you have to do a separate eviction procedure to remove everyone that kind of delays the process a little bit so you want to take a look at that foreclosure proceeding and make sure they dressed all the liens everything that's on there it's also very helpful to look at the foreclosure proceeding to get a rough idea if someone's still in the property is it going to be difficult to get them out and you can tell that pretty fast if there's a ton of filings on there particularly I found if they're pro se pro se meaning that you represented yourself and you didn't spend the money to hire an attorney to represent you in the suit if they're filing a ton of stuff in their pro se that kind of throws up a red flag that this person is fighting to the nail to stay in the property and it's gonna be tough to get them out so I usually make note of that that it looks like there's going to be a problem person and the property because it affects you as an investor evaluating the property it might even be able to get in there right away ORS are going to be you know City Chicago you know are you gonna take six eight months before you can get access to the property so that affects them we're gonna be evaluating everything in city of Chicago they have online where you can look up building code violations we're going to check that see if there's any building code violations on the property and also lets you see when the last time someone pull permits on the property can so you can see if there's any recent work that's been done to that's helpful we're gonna be checking the taxes it's so so so important before you even consider bidding on a property to check the taxes some of these properties there's no issues with the taxes some of these properties you might have one or two delinquent tax bills and and you as the buyer become responsible for that because remember this isn't a closing you're bidding on the deed to the property so once you get that property deeded over in your name you sumo responsibility this isn't a closing no one's giving you title there's no title involved here no one's clearing title no it's clearing the liens off title so you assume all that responsibility so like I said we want to make sure that any mortgage ladies and everything are being handled and the foreclosure proceeding they didn't miss anything there's a second mortgage you want to make sure their notice on the foreclosure so that that's wiped off of there you want to make sure all those liens are being treated in their foreclosure case but once you become the owner of the property you are solely responsible for the water bill the taxes all that type of stuff that falls on you now so if you buy a property and there's a huge you know I've had some buildings were unfortunately had a five ten thousand dollar water bail on a property when you're dealing with bidding on like an apartment building or something or maybe you had a two flat and everyone left the toilets running and nobody cared just left it like that in a cruded massive water bill that's not your water bill when you're dealing with the taxes I've I've physically gone to the auctions myself several times I've done it I've gone to judicial sale several times to go on to like kind of share of several times you can tell who has the information who doesn't there'll be people sitting there maybe have all the information collected on their iPads they know everything that they need to know going in i specifically remember sitting bidding on a property and I knew that there were three years unpaid taxes on that property and I was bidding against a couple other people and we were all kind of slowed down around the same number we all kind of stopped which meant that we had a value attached to the property but we were subtracting out the three months taxes that we knew that were due and one individual just over weight over bid all of us and I kind of looked at the other person you know there's about three or four people bidding and I looked at the one person I looked at the other person and one person kind of looked back at me and said I don't I don't think he knew about the taxes and I said yeah I don't think he does either because it was you went that he really wanted the property went that far over that I think he made a bad buy I think you I think he if I hope that got broke even because I don't think he knew the extent of the taxes that were due on the property that he so that all becomes your responsibility you need to know that going in so when you're attaching the values that you have to these properties and when we say the value when you're considering your property you're gonna have the address we're gonna look it up you'll run comm so if you're not an agent you're gonna want to have an agent because what you're gonna need to do is run cops don't rely on zestimate Zillow estimate that's that's not gonna get you anywhere you're gonna buy a lot of bad properties if you're relying on the Zestimate to tell you what the properties were that you're bidding on you want to have comps so you're gonna any property get real serious about you're gonna need to get you know like a rough CMA on the property just to get a sense for about what the property's worth both fixed up and as this because you don't know how much worth work it's gonna need so you want to make a good buy but it's gonna be worth you know potentially after you rehab it but you also want to get a really good buy for what it's worth as is the way that it's sitting as part of the advantage of going to these auctions is you could buy a property for you know a hundred thousand that sitting the way it is right now you can slap a sign in front of it and sell it for maybe 150 160 thousand don't even need to do anything that's part of the advantage doesn't happen a lot and usually people that are doing this are doing it because they want to get really cheap properties that they can rehab and make even more money on very rarely are they a flipping around just to put them on as is on the market that's that's really not the type of person that's doing this some people do but it's a minority most people want to get in these so they can rehab on themselves because they can't find properties cheap enough you know on the market so you're bidding on these properties you want to have a rough idea of what it's worth now sitting as it is right now and get kind of an idea of what its gonna be worth after you rehab it so and part of that is knowing how much your rehab costs are how much it'll cost you put in your kitchen and you put your bathrooms in do all that and again you're not gonna have any access to the property so a lot of this is guesstimate work you're gonna have to drive by the property take a look at it see if it's been on the MLS before sometimes you'll see you know eight years ago I was on the MLS and I'll say the property was absolutely gorgeous you know granite countertops everything that doesn't mean it's how it works now but at least lets you know that at one point the house has had some work done that it's not you know you're not walking and you have pink tubs or anything like that drive by the property get a sense for how well it's been cared for as you can imagine when you're dealing with these properties you're gonna get a lot of them that just look like they've been severely neglected and you really have no idea until you go in what are you gonna get it suddenly I said in the auction calm video I get people to call me that get these properties go in there and everything looks brand-new I mean the cabinet's have been cared for granite countertops the whole deal and I guess somewhere you go in and there's no there's no roof on the building you know there's nothing so you really don't know until you get in there so you have to incorporate in your really your worst-case scenario okay I'm gonna get in here I have to put in kitchens bathrooms you know the whole shebang to get this thing ready to go to either flip it or rent it out whatever you're going to do and then you still have to incorporate in closing costs to taxes like we talked about the water bill all that kind of stuff and some of it you might not know about until after you own the property unfortunately and that can get a little rough so you need to have a cushion in there for things that you don't know that could hit you you could get fines from the city of Chicago you know right off the bat that you didn't know that you're gonna get you know things things pop up so you need to be prepared for all those scenarios you need to be prepared if you have to do an eviction because sometimes it's really hard particularly doing the condos it can be really hard to know if the person is still in there or not you know it's really the single-family usually you can figure it out but with the with the condo it can be tough but particularly when you're doing the high-rises you know it's really hard to figure out if someone's in there or not unless you you know talk up someone at the HOA and they let you know if the person still in there or not sometimes they don't even know if it's a huge building they have no idea and that's another thing you know you're cooperating in if the HOA which most the time they are has a bunch of money that's owed to them and you as the person is buying the foreclosure are assuming that as well so there's there's a couple different laws you need to know and we can get into this in a different one because it's it's very fact-intensive but when you're dealing with a condo that you're buying at auction there's specific rules as far as when you get the deed to the property you now have to start paying the HOA dues going forward so you want to get in there right away and let them know that you bought this property and start paying the HOA fees right away because if you don't there is a statute there's some case law that would suggest that if you don't approach them right away they can come after you for the total amount that's due from the homeowner there was some case law where someone didn't have that overturned and I have to check and see where that's at right now so that's something I'm concerned for you please reach out and I can check on that let you know where we stand with HOAs and foreclosures because it's been changing that landscape has been changing a lot but my recommendation of my clients is get out there if you get one that's in a condo get out there and contact that HOA right away just start paying the HOA dues third for when you have the property right now say you don't run into that problem no you want to you want to perfect your ownership in there and not not have to even deal with that because why would you want to create you know more liability for yourself you don't need to so get in there start paying their HOA dues and then the HOA is going to at a minimum want you to pay some of the some of the HOA dues that are owed but why I think we'll do that in a separate video again it's very fact-intensive whether they want you to pay the last six months that were owed and and how you can even verify if that was really old and all that I'm asking for a ledger to verify how much HOA dues are or if they're just trying to get six months from you I think we'll do a whole separate issue a video to address that but just know when you're bidding on condos that when you're dealing with the HOA is it can be a little bit of an issue and then you know well then you have a whole step addition when you're dealing with the small buildings like the two and three flights even finding out what was the HOA ever was responsible for it I think we need to break that down into a whole separate video so you've identified your property you're bidding on it when you go to bid on a property I'm going to use judicial sales as the example cuz this one that's the most popular when you show up number one is you need to have cash on hand and buy cash on hand I mean you need to have a cashier's check cashier's check needs to be either in your name or whatever LLC you plan on purchasing a property yet you need to have most the time it's 10% they'll identify let you know if there's one we need to have 25% if for some reason everyone's a blue when they get one or it's it's higher than that but most of the time is ten percent of whatever you're going to bid you need to have in your hand as a cashier's check when you're walking in the room they're gonna check you in and ask your driver's license you're gonna see your cashier's check then you fill out a form after you do all that then they give you a paddle it's very very old-school it's kind of fun you get you get just a white paddle with your number on it they assign you your number they give it to you and you go sit down so you have your cashier's check in one hand you have your paddle on the other hand and you're ready to go so you gonna sit there and you're gonna wait you don't get a paddle when you do like the the sheriff auctions they pretty much just open it up to whatever is their can bid which again can be a little confusing because you don't want to run a new situation where you have people bidding that don't have the money so as soon as you've been on the property there they want your check right now they stop it you know they're not going to keep going away till the end as soon as you've been a you know bid and win a property they want you to come come up right that minute and give them that kiss you're gonna take it from you right away because if they you don't have money they want to know that right away they're gonna open the bid back up and they may ask you not to come back again you don't want to be that person it really messes up the whole process so as soon as you win a proper you're gonna go up you give them giving you a check right there on the spot in front of everybody they don't mess around so going back to Ducie sales so you giving your drivers life since you checked in you got your paddle you sit down they're coming and they just they don't mess around then I do a little intro they might let you know how it's gonna go if they're just going to go through it they're gonna start reading off the properties they'll read off the property they'll give you the opening bid at that point at that very moment is most of the time your first time knowing what that opening bid is going to be so that's where we're talking about both the research and actually the physically going to the auctions why I say some people get burnt out when they try to do this so white auction Commons become so popular because you can sit at home and your pajamas and bid on these properties and it's not a big deal to do it on your phone it's not a big deal the auctions are usually in the morning usually at nine ten eleven o'clock in the morning depending on the sheriff or what company you're going to that's every morning not every morning someone sometimes they skipped is but it's almost every morning and they start on schedule and so you have to spend your afternoon doing all your research get up get your cashier's check in hand go there and sit there and be ready to go at 10:00 a.m. you know you're free doing judicial sales are done in the loop in Chicago you know fight the traffic go down there if you are real serious about doing it there are people that offer services where they go bid on your behalf you need to get them the money ahead of time so they're gonna want you know again they need to have that there cashier's check in hand so you're gonna need to get them either the money wired to them or you gonna need to get them the cashier's check ahead of time so they have that otherwise they're not gonna bid for you so you can't look into doing something like that but most people in the beginning are gonna want to do with themselves because they want to know how the process works so you're gonna go down you're gonna bid on it you're gonna be sitting there they're gonna read off the properties and they're gonna give you those opening bids they'll say you know address you know 1 2 3 Main Street in Northbrook Illinois opening bid is a hundred thousand dollars at that point then you have the opportunity to bid and every time you bid they'll give you what the increment is different places have different increments judicial sales I think is a hundred dollars and then there's a I think there's a different company that's more I forget now but and the other sheriff that they'll just kind of tell you or it's just open or whatever what they don't want to have is everyone bidding up a dollar at a time so they set a minimum bid so they keep things moving so it's not people going $1 or $2 $3 they set minimum amount so that they can keep the process moving along so they don't spend an hour around one property so they'll say you know $100,000 you'll say hundred over and they'll say okay now the highest bid is one hundred thousand one hundred dollars if someone will say one hundred over or some people just want to move the process along I'll say one hundred five thousand and bump it up different people have different bidding strategies that you'll see in there and you'll get a sense for the room right away of what different people's strategies are when you're getting close to the end obviously you're really excited when you're bidding on a property bidding against someone else you're a combination of both excited and pissed off because you're thinking in the back here head wow I could've got this for a lot cheaper this other guy wasn't bidding me up the whole time or lady or whoever it is I've had some random people just bid up for the sake of bidding up for reasons that I don't really still don't understand I've been on little properties where an opening bid was 40,000 and I've been 40,000 you know one hundred dollars and someone in the back of the room said well you know forty thousand three hundred dollars okay for two thousand five hundred dollars and then they didn't bid again check out for forty thousand five hundred dollars god I strange things that happen in auctions and then you'll see some auctions where a really good property the first way you know that you missed out on a good property is if you're sitting there and you're opening bids a hundred thousand by the time you get done he people have been bidding out and they ran it up to two hundred fifty thousand that's when you know that you missed something in your research and you need to go back and figure something out so at that moment when they call it the address and they call out the opening bid you don't know so you're doing all this research you you spent all afternoon doing research you went down you're sitting there you checked in you have your cashier's check you're ready to go and they're calling out the opening bids and I've had this to where you spend all day you're really excited about a really good property you thought well you know I can buy this little condo for thirty thousand and rent it out will do really well with that and you sit down and you get ready and they call out the edges to the property and the opening bid is $125,000 well I was hoping to pay thirty for it and fair market value for the property is probably about ninety thousand so I'm not gonna pay a hundred twenty-five thousand so what happens is no one potentially bids on the property and then at that point when no one bids on the property the default highest bid is the bank so what happens is that deed then revert back to the bank so when you're bidding on a property you're bidding on the the opportunity to buy the property straight from the from the foreclosure proceeding and really circumvent the bank so when no one bids on the property the owner of the property becomes the banker the investor that is foreclosing on it so when you see a property and that you really liked and the bid was just too high you're thinking no one's gonna pay for that that's crazy you could still potentially get the property what's going to happen is that file now is going to go to the the courthouse they're going to complete the foreclosure proceeding and that deed is gonna go to whoever the end of the line is wherever the bank is that process can be difficult as well because you could be dealing with the mortgage is being held in some sort of a trust or in a bundle in a bank in a different state and knowing who actually is going to be the end owner of the property can be very difficult I've spent months and years trying to track down who is the real owner of this property also had several occasions where we isolated a property or unit that we really wanted we spent years chasing who owned the property and after we finally found out who owned the property they didn't even know that they owned the property which is frightening that I've had several cases where chasing down the seller for property that we saw that was up for auction that we needed for whatever reasons for a variety of reasons but we needed the property chasing down the seller and I just dealt with one last year where there was no deed recorded on this condo or I'm sorry the deed was recorded on the condo but every time I reached out to you know it was one of those banks where it wasn't a bank it was it was really like a mortgage holding company that was through a trust that was through something else so no one really knew who was supposed to own it and it sat there for I was representing the condo association it's not there for two and a half years empty and no one ever came around and after a lot a lot of time a lot of research we figured out was the bank didn't know that the foreclosure proceeding was completed now the deed had been recorded but they in their internal system had not marked that the foreclosure proceeding was closed so they never moved it to the different apartment so for two and a half years they didn't know that they owned this property it just sat there complete inefficiency on their part so we were able to step in once they figured out they owned it they immediately realized they wanted to get rid of it as soon as possible we were able to step in and help facilitate that sale and get it done very quickly there was aged a lot of HOA dues there were oh there's a lot of taxes that were oh there's a lot of everything so they realized that they needed they messed up and they needed to get this one done fast so you can't identify properties that go back and just watch them sometimes they go up on you know the MLS immediately sometimes they don't sometimes to get a sign because you don't know what's gonna get assigned to it could go get assigned to HUD and become a HUD property it could go to another auction house they can try to auction it off it could sit and they just won't put it on the market for a really long time for whatever reason that they decided to do that you don't know you don't know at that point it really becomes their property and it's not up to you so all you can do is watch it check keep an eye on it and try to get the first opportunity on it when you can but aside from that so if you win the property and go up you get to give me a check because Illinois is a is a judicial foreclosure state what will happen is tonight you won the property gave him your cashier's check you're gonna get a receipt you're gonna want to keep that you need that originals you need the original receipt that they're gonna give you don't lose that and don't make a copy of it and lose the original you got to keep that original so give me some paperwork and keep that next up for the process and this is where people get confused to say well now what do I do I want it what's next the what's next is now the property has to get confirmed what does that mean so when you get foreclosed on in in Illinois and particularly in Cook County they're gonna notice up the the owner let them know that it's being foreclosed on they're going to go the whole proceeding they're gonna get a judgment of foreclosure against them then after the judgments entered there's a certain amount of time that they give them usually about maybe 90 days before they put it up for sale put up for the the sheriff auction or judicial sale whatever so every of the timeline is lapse where now they're pretty much having don't have any Redemption rights at that point hopefully when it goes up for sale they should have done everything properly were it could go through we're what you don't want to have is what they try to avoid you bidding on a property win and think you own it and the homeowner comes back and say pays off the the lien and now they have to return the money back to you and they don't want to have to go through all that so Johnny when you're bidding on they perfected that the judgment the homeowner can still because the foreclosure case is still open the homework can still come back and challenge it at that point your biggest risk is if they come back and challenge it and say they weren't served correctly which if they're not served correctly then they have to throw out the entire case and start over and now you've lost the property you as the person who bid on it at auction there's other things they can challenge you for they could say that the auction wasn't handled correctly that usually doesn't win there's other grounds that can try to challenge the four cores of proceeding on the only one that really works is if you can show that they lied on the affidavit that they served you correctly and again that very rarely happens so you you don't want to be you don't want to be holding it if they weren't served correctly but that rarely happens so most the time you're gonna get the property so that you've won it you have your receipt the gold has go back to the core when it goes back to the court now there has to be a confirmation of the sale what it was the confirmation of the sale mean all the information goes back before the judge the judge is going to review how much it won for at auction the auction procedure all the details that were involved with it you know what they'll see you as the bidder it doesn't really matter who they don't really look at the bidder but they're gonna look at how much the bid was for and approve it they're gonna prove the approve the sale again the homework to try to challenge it but there's very few grounds I've ever seen for someone successfully challenging a CLS there was something really improper that went on and if something like that happens you know whatever service is offering that auction is probably not gonna be doing it much longer most of the good places you know know how to handle it so that kind of thing doesn't happen so there'll be a hearing the hearing will be really depends on how quickly the foreclosure Turner and foreclosure attorney notices it up so they could be in 30 days it could be in 40 days could be in 60 days if they sit on it it could take a while before you get that confirmation until you hit that confirmation you don't have the deed yet because it has to get confirmed once it's confirmed then you get your deed and now you have the property until that you don't have the property you just your money's in limbo I forgot the detail with the money so you're gonna give them though you're gonna give me a cashier's check right away right there you have 24 hours to give them the remainder of the money I apologize I forgot that detail so you need to have all the money ready to go this isn't giving them some of the money and then I'll see you by getting the rest and I'll finance it or whatever the case may be you need to have the remainder of your cash ready to go within 24 hours if you don't have the money in 24 hours you've now lost the property so you need to have cash ready to go either need to have your cash an investor's cash or have a line of credit that you can immediately pull on and there's a lot of services that offer that now it's become really popular I've seen a lot of entities offer lines of credit for people to go to auction so if you're interested in doing it that's definitely something to look into if you have some assets and liquidity you can get a line of credit for this type of thing pretty easily right now there's a lot of them out there so you can pull on the line of credit immediately and pay for the property so you're not just using your own cash either way you need to have liquid cash ready to go within 24 hours if you don't you are not buying an auction that that's just that's the end of it you you have to be liquid or have access to liquid funds to do this if you don't you are not going to buy an auction that's that's just a that's that's this is a cash cash world this is a cash purchase and if you don't then then you're not going to be able to do it the best you could do is try to partner or someone that's already doing it and generally the guys that are already doing this if you have money to throw in they'll take your money but they're not really looking for partners so it's it's you need to do be prepared with research and with cash that's very important so so you put up your cash but your cash is gonna sit there really in limbo for like thirty to sixty days until it gets confirmed which you know some people get a little squirrely about and I totally understand it I mean your money is just sitting there I meet you it's just doing nothing it's not incurring any interest not doing anything so you're gonna go i generally as a habit when one of my clients calls me so that one appropriate sale at the foreclosure auction I pull up the case right away I find out who the foreclosing attorney is and I generally reach out to the attorney remind them that the sale that a third party one to bid today and remind them that we need to get that confirmation hearing know to stop as soon as possible I try to be really nice about it don't be pushy there's no reason to be pushy they're generally overworked and underpaid so I just it's a friendly note just hey just letting you know if you can get this noticed out as soon as possible we'd appreciate it to get this file off your desk and get it completed it's because when the file is completed then they did paid too so just a friendly nudge it's not it's not trying to be forceful it's just a reminder really of hey if you get this no - stop right away we'd appreciate it we will be attending the confirmation hearing if there's anything we can do to a help with getting the case closed out pretty simple um it helps I found that it helps because otherwise they might forget the they might not do the know to the confirmation hearing for a couple weeks or they could do it instead of doing a couple days and you get in there sooner so you get the notice confirmation sales up it's a hearing like any other hearing you go to a foreclosure you know go to the foreclosure court house go before the judge sometimes I stand up sometimes they don't I usually wait and see if it looks like anyone's there so if it's just a foreclosing attorney that's there no one else has showed up it's just me and him or her oh I may or may not even stand up I might stand up just to say hey I'm here to get a copy of the order to ask the clerk if she can you know make sure I get the copy as well as the foreclosing attorney said they don't just put it in the file and because it you know don't make sure that you walk out there with a copy of you let them know sometimes they don't you know if it looks like the the attorneys got a lot on this plate I'll just wait and then say hey can I get that order from you you definitely want to stand up if there's people there so there might be an attorney there for the defendant for the homeowner yeah at the confirmation sale the judge is not only going to confirm the sale but then we'll give them the date for hawing they have to vacate the property by default they're gonna get about thirty days if the attorney is there and she asks for it generally the judge is going to give them 60 days so now instead of getting in the property you know potentially removing them from the property in 30 days now I gotta wait 60 days to get them out if just the attorneys there you know I get the the copy of the order maybe I'll get that attorneys name and phone number in case I need to reach out to them I don't let my client know hey it's we're gonna have to wait a little bit to get in there if the property owner shows up then that kind of throws up a red flag we're gonna have a little bit of an issue although it is helpful it's a double-edged thing because the homeowner is there you know you have an issue you know you're gonna have a problem getting them out now they're gonna they're gonna fight the last part of the process but it's also good because now the homeowner is there now I can talk to him I can say hey listen my client bought this property what are your intentions what are you gonna do what do you want what can we do for you how can we help you know you can't stay in the property no we're not gonna rent it back to you we needed vacant but how can we kind of how can we help you with that gives your gives you an opportunity representative your client to kind of extend an olive branch to prevent it from getting ugly sometimes I found that if you offer them a little bit of a helping hand it goes a little better than then going in with a sledgehammer and just trying to get them out of the property sometimes you kind of sweet-talk them a little bit what you're really trying to do at the end of the day when you're talking to them is explain to them that this is happening and you can either get something out of it at this point or you can do nothing and you're still going to be you have to exit the property at some point so let's be realistic you know let's let's look at this for what it is and you know you've exhausted all of your efforts there's nothing left so there's really no scenario now we're you're gonna stay into the property so let's let's let's look at it for what it is because that's that's really at this point when it comes down to sometimes the homeowner is still in a little bit of denial that they're gonna stay into the property they'll say no I'm still I have a pending loan modification I know you don't it's that that's all over now that's not wrong I'm trying to do a short sale well the the the foreclosure is done now so there is no short sale you know they're they're still in denial a little bit so you sometimes you have to kind of sit with them and really explain to them you know listen this is this is where we're at this is this is happening so let's let's be realistic what's here's the options that I can give you that my client said that I can offer to you to incentivize you to leave sooner you can talk to the attorney about that too it was just the attorney that's there sometimes they wait a little bit just to kind of go to censor oh I'll go to the attorney just kind of get a sense for what their attitude is because some attorneys kind of come on strong with that and some attorneys are like you know give us an offer and I'll explain it to him you know what the situation is to see if I can get them out it's because they would rather their client get some money than no money I mean that that's that's really what it comes down to at that point and I've represented people on the other side of that and I try to do the same thing I try to explain to them listen you're you're in this scenario now this person will give you money till to leave now to you know rent something else to pay for the movers to pay for whatever so take it you know and some people just say listen I don't have any money to rent anything I don't have any place to go I have nothing so I'm gonna wait until the basically the day that the sheriff shows up and I say okay that that you know that's your decision oh man and I let the the other parties know about that and I try to get the sense from the other attorney when I'm on the side of the person bidding on the property that that's the situation that these people understand what's gonna happen but they're just gonna wait till the last day and it's unfortunate you know you have the opportunity to try to get something you know take it you know don't take the gift horse in the mouth so you have to wait them to get access to the property but so when you the confirmation goes through now you can take your receipt from judicial sale go back over or go to the sheriff's office or go wherever you're gonna go and get your deed now you have the deed oh so now you're done right no no you're not done you're never you know is there's always a little bit more it's very sometimes people forget the steps that are involved so now you have the deed in hand remember you've assumed everything with the property they're not giving you title they're not giving you anything there's no title company involved there's no closer involved you have to assume everything so you ever deed in hand now you have to record it so what's involved with recording I wait I have to pay the recording fees that's easy now if usually recording fees are what like you know 50 55 dollars somewhere else it depends how many pages you're out well that's not a big deal right well you have to pay the chance for taxes now so when you're dealing with you know the state of Illinois Cook County and then whatever municipality you have Chicago whatever it is there's gonna be some responsibilities as far as paying the transfer taxes for the property well maybe we'll do a whole separate thing on that because there's a lot of statutes dealing with when you do have to pay transfer taxes and when you don't but for purposes of this for right now assume that you are gonna have to pay the transfer taxes on them in some places like City Chicago when you're the buyer the property is not cheap it's gonna be a little bit of money that maybe you didn't incorporate in so that sometimes that's a shock for people to when they realize how much they have to pay for that type of thing when you're dealing with the suburbs this becomes very important in your deal evaluation system that you put in place software what a team member whoever is responsible for this you need to take a look and make some notes as far as what villages or towns or municipalities are problems there are some villages that don't care that you bought it at judicial sale they don't care that you have the deed in hand until you satisfy them you're not recording that deal so it's important to remember that there's some villages that it's their way or no way and until you have their stamp or their most of time it's just a stamp that they you get at their office or sometimes they have old school ways to have stickers and some of the older villages still have the stickers that you put on there you have to satisfy them before you get it and without that you can't record your deed so you're stuck in this limbo so you have a property that you own but until you record it like you can't flip it or sell it or anything like that so you have to go to the village and find out okay what are the requirements a lot of villagers don't have any requirements they say you know god bless take good care of the property fix it up so we don't have this eyesore in the neighborhood anymore so I'm villages say we don't care I don't care that you're an investor and you're gonna fix up this whole property that looks really bad in the neighborhood you're gonna do it our way and by that you have to get an inspection done they're gonna come out there inspect the property they're gonna give you a punch list of everything that you have to do to satisfy them and when you're dealing with these properties that may have been abandoned or was living there having them and you worked in a long time I've seen the inspection reports come back six seven eight pages deep of hundreds of repairs that they're gonna require you to do to that property I've seen some pretty crazy inspection reports come back so be prepared for that too or make sure in your deal evaluation system that you're marking that okay this property looks really good but it's in a village where we know that they're gonna be all over us like a duck on water as far as what we have to repair how we're gonna repair it pulling all the permits and then getting an additional inspection to make sure we cleared everything to their satisfaction before we can rent out or sell that property now if you don't know what I'm talking about please reach out I can give you a list of those municipalities so that you know going in that there's certain villages that are going to be a problem for you not sit you can't make a lot of money and ironically some of these villages that I'm talking about I've seen people make a tremendous amount of money flipping properties but it's gonna be way more intense for you as the person trying to execute it there's gonna be way more requirements put on you a lot more time as you know it's gonna be spent running back forth to the property running back and forth to the village hall making sure everything is done right in order to get it done so it's it's if you're buying a property from far away it's not uncommon for investors to buy a property that's in the next county over but if you're expecting to drive there every day that's getting a tiring real fast and I've had that what the investors saying I'm so sick of sitting in my car you know a couple hours a day going back and forth to this property this is a mistake buying it I'm still gonna make money but I'm exhausted so factor that in to make sure that you're not saddled up with the property it's gonna be very labor intensive for you as the investor or homeowner and we can go we can go more through that if you contact me as far as a municipal restriction so after you satisfy all that you get everything all done the villages happy or at least satisfactions I have be satisfied with what you've done you've met the restrictions you have their stamp now you've go the recorders office you record the deed now you own a property so now you're on the on the owner of record now you get the joy of getting any notices that you weren't worried about of any bills that were owed on it maybe you know when you show up to the village hall you think you've done everything and oh by the way there's eight bills due for a grass cutting because no one was taking care of the property for a year okay okay well I have to pay those little things like that will pop up city Chicago you'll think you have everything going right with the property everything's good and you get you know six tickets because the dumpster was overflowing and there were weeds and and all kinds of things wrong with the property that you didn't even think we're gonna be a big deal but city needs its money so it's a big deal now you're gonna have to pay those bills especially when you unfortunately found when you buy a property and you attach an LLC on it so now you own it and you know one two three LLC go fantastic an investor bought this property and you get every ticket you can think of because now you can pay two tickets as opposed to the previous person who couldn't pay the tickets it happens and I get it a lot with properties as soon as a LLC goes on there magically everything that you can think of is wrong with the property that you have to pay fines on part of part of the cost of unfortunately doing business I found in the city of Chicago so and we're gonna do a whole separate thing on administrative fines particular the city of Chicago because you need to know about that you're gonna be investing in it so you perfected you deed you have everything done you're going you're gonna have to go through the process hopefully you've gotten the person out of the property and now you can start doing your work to it or you're gonna have to go to the sheriff's office to have them forcibly removed and like I said if you don't have all the people named on there that are occupying the property you may have to go back and still do an eviction all the people that are in there or unfortunately what I've had is some people show up and they're the people who were foreclosed on rented it to someone else and now they have a lease well even though it's be us that they have the lease on they're just uh police so if you call the cops they're not gonna remove them because they have in their opinion about at least on the property they're not gonna make that call so now you have to do a forcible eviction on this fake tenant in the property it's all the joys of doing this process so just be aware that you're gonna put up the money it might be a while before you really get access in there but I'm telling you obviously all the horror stories there's some really great ones to where all my clients have bought properties at auction showed up got into the property right away and flip them there was no issues that's part of the process of driving by the property is trying to figure out if it's occupied or not because that makes a big difference both withholding costs and you don't have to pay for an eviction so now you want a property congratulations hope everything works out well most of my clients that have done this have made a tremendous amount of money doing it that way it's a really really a great process but it's only available to those people who have access to the cash to do it you're not gonna get you know even moneylender or anything you have to have money within 24 hours so if you can raise the cash to do this it's a great way to buy real estate can make a tremendous amount of money doing it it's very exciting but have a system in place have a strategy of what your approach is going to be so you don't get burnt out with it if you are looking at any auction property or you bought an auction property I've gotten a lot of clients that way that are you did everything bought it and now they're confused by the whole confirmation process reach up I'm always happy to answer any questions I know it's it can feel very daunting particularly when you get in the courtroom aspect of what your responsibilities are what can happen especially when the homeowner starts using some tactics to stall the confirmation hearing and then people get very frustrated very fast going oh you know what did what did we get ourselves into now I thought we're just going to buy this property and flip it so feel free to reach out always have to answer any questions call or email and I'll talk to you soon

Channel: Floss Law, LLC

Views: 3,199

Rating: 4.9024391 out of 5

Keywords: Judicial Sales Corp, Judicial Sales Corporation, Sheriff Sale, Sheriff Auction, Foreclosure Properties, Foreclosure Properties Chicago, Foreclosed properties chicago, Chicago foreclosures, Chicago auctions, Sheriff Sale Chicago, Sheriff Auction Chicago, Bidding on property at auction

Id: wre-WljSj6Q

Length: 53min 28sec (3208 seconds)

Published: Wed Dec 12 2018