Access Wealth Strategies

In just the past 2 years, the real estate market has fallen nationally more than during the Great Depression and more than our most esteemed economists predicted.

Many real estate investors are looking to purchase distressed homes for LESS than the current market price. There are two main options, a bank REO or a trustee sale property.

Foreclosed homes (except through bankruptcy or judicial foreclosure) are sold at auction on the courthouse steps in most jurisdictions.

Why are homes sold at the trustee auction?

This is the legal process to transfer title from the delinquent home owner (borrower) to the mortgagee (lender ).  The lender sets the minimum bid and in most cases wins the auction – the foreclosed home then officially becomes part of the bank’s REO portfolio.  However, sometimes an investor can outbid the lender (the bank) and acquire a home at a discount to the current market price.

Why would buying a home at the trustee sale auction make sense for the real estate investor?

If there is a large enough discount between the price bid at auction compared to the current market price (i.e. comparable sales prices on MLS), then the investor can flip the property for a capital gain or in some cases rent it out for cash flow.

Video Tours of Trustee Sale Homes

Watch this video tour of a home purchased at the Phoenix trustee sale auction to see a home before it is fixed up.

In this second video, we tour a different home that is fully fixed up and on the market. Since the home looks better than new and was well priced (at a discount to current market price), it received multiple offers during the first week of listing on MLS.

You might also like…

Jim Kingle’s video More Around Town, for a look at the San Diego trustee auction in live progress.

My previous posts about trustee sales:

• Real Estate Investors Making a Killing at Trustee Sales
• High Flipper Ratio at Trustee Sale
• Bargain Homes for Sale

Please comment below and let us know if you like this post and what information you would like to hear more about.

Jim the Realtor posted recently that over 700 homes in San Diego sold at trustee’s sale auction during the past 12 weeks to a party other than the beneficiary (lender).

The “flipper ratio” (ratio of homes sold to 3rd parties / total number of homes sold at auction) was over 20%.  This is historically very high.

Read the story and review the data in Jim’s blog: 700+ Flippers

Listen below for a brief background on the trustee sale process.

Why are all those homes sold to investors instead of going back to the bank?  I think this indicates that the pricing is finally low enough for investors (who are paying all cash) to buy a house and either flip it to a home buyer for a quick gain, or turn it into rental property (some lower-priced homes might even cash flow positively) to hold for a longer-term gain.

What do you think? Please add your comment and let me know.

Every wonder what happens when a tenant occupied house is foreclosed?

Listen in as a fly-on-the-wall as my favorite real estate agent (Jim the Realtor) approaches the tenant of a house just foreclosed 2 days prior.

How would you handle this situation as the bank’s realtor who needs to have the place vacated, cleaned, and prepared to be sold as a bank REO?

Watch the video below as Jim Klinge records his initial conversation with the current (and soon to be former) resident.

Please comment below with your thoughts.

True investors want to purchase an asset at a discount to today’s fair market value.  In the past, this was a big challenge for real estate investors.  However, now that we are in a real estate recession, investors can finally purchase houses for significantly less than “today’s retail price.”  One method to do this is at the court house steps through a trustee sale auction.

Watch the video below from my favorite realtor, Jim Klinge (aka Jim the Realtor).

Apparently Jon Mann, San Diego real estate professional investor, purchased this home yesterday.  As Jim says Jon has been “on fire” buying 20 to 40 homes a month “just making a killing.”

Note: We’re doing something similar in the Phoenix market with our friends.  It’s (finally) an exciting time to invest in real estate!