Post 5
In what situations is it worth buying HOA FORECLOSURE and how much money can you make from it?
In a previous post I explained that there are other parties that have a "right" in the US property taboo, even in cash buys. So how does this actually work and what is the right strategy to make it profitable?
I want to remind you that we are talking about off-market real estate with distressed property owners so what does that mean?
We all remember the economic crisis, there was a lot of mess, most of all the foreclosures load at the time of the banks did not know right and left, sometimes it would take years to just start the FORECLOSURE process because they had so many cases to foreclosure. They were in extreme uncertainty which led to a great opportunity for investors who want to think outside the box, I was one of them.
So it works and what the psychology is behind the foreclosure process
As soon as the property owner stops paying a mortgage, he usually stops paying the other parties to whom he is liable, such as a home committee, taxes, etc. In this situation, the landlord also does not care about the property or its condition, and is exposed to foreclosures from all parties who have an interest in the property as Which we have already noted
Let's take a scenario of an asset whose mortgage is higher than the value of the asset and how do you make a profit from it?
For example:
The value of the property is $ 200,0000
Mortgage $ 250,000
HOA debt of $ 10,000
Master HOA Debt $ 3000
Taxes: $ 6000 debt
As you would like from the above scenario there are more debts than property rights. Why would I want to buy a property that has debts higher than the value of the property you ask? Well it depends on the strategy, and I will explain exactly how to create EQUITY FROM THIN AIR In the current situation.
In this situation, competition begins, all bondage owners want to get what they deserve, don't they? So what happens in this situation who has more power and who less, and how to make money from it .. Let's start from the municipality - with the debt of the 6000 are the strongest in the bondage. They are a government body and according to Florida laws, they can "foreclose" in the FORECLOSURE process all other liens, including the bank ... For its part, the bank has the highest EQUITIABLE CLAIM, because it owes it $ 250, and it must maintain its position. After all, if the TAX COLLECTOR starts the process of foreclosure then the bank could be in trouble. An important point to note is this: Almost always if there is a tax debt the bank will pay this debt because it wants to keep its TITLE in POSITION. For him the bend of the municipality was out of the question.
As I mentioned before, usually the property owner who does not pay the mortgage also does not pay the rest of his liabilities, such as home taxes and the like. As a result he owes money to several parties, each of these parties can register to work and start a FORECLOSURE process on the property. In such a situation, "competition" begins between the various parties. Who is the first to register the debt against him and begin the foreclosure? It is not always known, but most of the HOA will not wait too long and start the process themselves, they can not wait for this money is for the benefit of the community as a whole and the costs The extra falls on the other tenants.
In most situations the HOA will start a faster foreclosure process than the bank. This is because their legal process is faster than the bank because they are obliged to show fewer documents in the courts to prove their case. Thus, if the landlords do not take responsibility and arrange their payment against the HOA then the HOA will bring the property to the receiver's auction and there will be investors like me.
Before the auction it is important to do a taboo test, which is what I do before I purchase any property in the auction. In this test, the idea is to identify which side makes a bend? Is it bank, HOA, TAX etc? This is how our strategy in Kenya can be understood. Buying the HOA The process of checking the taboo while buying the HOA FORECLOSURE is very simple: I need to know one important thing - did the bank start the FORECLOSURE process? If the bank has not started the FORECLOSURE process, and I buy the property from the HOA's FORECLOSURE auction then I get a TITLE for the property which is subject to the other liens that exist in the property. At this time, I already know that there are other liens such as a $ 250 mortgage, taxes, etc., but the bank has not yet started the FORECLOSURE process.
What does this mean for us and how does it help us?
Well, if I bought the property and got TITLE, as soon as the bank starts its FORECLOSURE process (which I expect will happen anytime, sometimes within months and sometimes even years) then in the claim itself the bank must include the new owners who bought the HOA. This gives those who bought the HOA FORECLOSURE - a standing right. This means that the buyer is already a party to the claim, and thus the bank is also suing the new owners for "cleaning the TITLE". But, the investor who bought this property is now at an advantage ... It has a direct channel in front of the bank, because it is attached to the claim, and at this time what I would do is take FORECLOSURE DEFENNSE ATTORNEY to fight with the bank for years while I rent the house.
At this time since the house is not really my, my strategy is to keep it As long as possible While I have been fighting with the bank for years and collect a leisurely leverage on the house floor. Importantly, in order to hold the property and rent the same The only one I keep paying after purchasing it is up to a house, In order to maintain good order with the community and for them to approve me tenants, but me Does not pay taxes, Mortgage, Or anything else to own the property. I did not sign a mortgage or PROMISSORY NOTE so to FORECLOSURE has no significance against my CREDITWhat I did is MYSELF POSITIONED in Taboo with an accurate strategy designed to hold the property for as long as possible while I was renting it out.
Let’s take an example of a property I bought at HOA FORECLOSURE in 2014 and still hold it to this day:
This is the property, you are welcome to check it out
Worth $ 800,000
Purchase Price $ 27,000
Date of purchase January 2014
Condition: Still holding the property
I bought this property in January 2014. The house committee made a foreclosure and I won the auction, and the house committee is $ 1150 a month, which is the only thing I pay to own the property. I don't pay $ 11 in taxes a year, and with the mortgage, I'm still fighting. At that time, I was renting the property for $ 3500 a month, so let's consider risk versus profit:
I invested about $ 30 to get the position on the property, plus I had to bring it to the state that it would be leased and then find a tenant, so I had to wait a year or so to get my investment back home right? 27 a thousand dollars.
In the second year of every month, I made 100% profit, so in fact 3500 rent less 1150 and an equal home $ 2350 a month or $ 28000 a year. Multiply the annual profit in all the years I rented the property and rent it to date, $ 28000 double 6 years worth $ 168,000 after paying the $ 27 investment in 2014… From 2011 to 2018, I purchased HOA LIENS for over $ 2 million, or 150 properties. We all renovated and rented for years, we knew how to deal with the legal issues, thus creating a significant advantage over the other investors, who were scared to do risky shopping because they simply did not have a system that can handle complicated niches that require a lot of cash, speed, lawyers, and many requirements. renovation. At the height of the activity, I would buy over ten properties a week.
The main goal here is to emphasize not my success, or some ego-speak, but to explain to real estate investors to look for more people and partners, look for YD that you don't have, it's worth it. So do millions.
And after talking all week about niches, complicated calculations and foreclosures tomorrow, we will deal with the same issue. what is? If you don't read, you won't know ??
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