The Foreclosure ProcessGlen Gallucci
August 4, 2008 — 1,222 views
When a property is being foreclosed and sent to a sheriff sale or auction, the minimum bid usually includes all the money owed to the lender. These amounts are a total of the balance of the loan, attorney's fees along with any other costs which have be incurred during the foreclosure process.
When you bid at a sheriff sale for any properties, be prepared to have a bank check in the amount of 20% of your bid price. You also get the property in "as-is" condition. This may include getting the house with the old owners still living there!
It's the "as-is" part where many new investors can get hurt financially. Many times you cannot inspect the inside of the house. This can become a very risky investment as many times the inside of the house has had all the copper pipes removed, the toilets or waste line are clogged, the basement is full of mold, the inside foundation walls are cracked and unstable, the plywood on the roof is in need of replacing and a host of other problems. This type of investment is best left to the professional and experienced investors.
Since the amount of money that is owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale. This is the time that the property "reverts" back to the lender or the bank. It now becomes an REO, or "real estate owned" property.
Glen Gallucci, also known as "A Seasoned Investor" actively buys, rehabs and sells residential properties. He has invested, renovated and built numerous residential and commercial projects during his 30-year career. A well diversified businessman; Glen is also engaged in real estate education. From the trenches, and with his down to earth "tell it like it is" teaching style, makes Glen the "real deal" and a sought after speaker around the country as his business experience proves invaluable for the beginner as well as the seasoned investor regarding the successful structure of starting a wholesale or rehabbing business as well as securing private lenders when investing in "quick turn real estate."