Buying, selling and operating apartments in Portland

Chronicle of an Apartment Foreclosure | 24 September 2010

Since I get asked about foreclosures, I thought I’d go to one and give a few observations.

<<<Chronicle of an Apartment Foreclosure>>>

Above is a link to a more detailed account and a couple of pictures.   You can either open it or right-click and download it. 

However, here are some points I gleaned:

1)      Realize the bank with debt (foreclosing creditor) will be present to make sure a minimum amount is paid and probably up to whatever outstanding debt is.  Find out that number is first to gauge your interest level.

2)      Be prepared, you will need to move quickly and have ALL of the funds needed available the same day or very soon thereafter.

3)      Try to do as thorough an inspection as you can, but property will be sold “as-is”.

4)      Determine recorded liens/debts against the property and be sure to establish who will pay these.  In most normal property sales, you will get a warranty deed which is unencumbered with debt since most liens need to be paid off at time of transfer (ie cash for the property.)  However, a deed can have exceptions (aka the fine print.)  These may state as part of the deal that if the seller pays off liens, that they will be re-entered against the property for you to pay eventually.

5)      In most cases, you will need the entire purchase price almost immediately after the sale.  If you are borrowing cash with the attempt to re-fi – Check with your finance person first to primarily ensure the property can be re-financed.

6)      Consider the idea of purchasing a note from a foreclosing creditor and negotiating with a debtor for a release of the property.  It may give you more time to evaluate the property and raise money.