Courthouse Steps-second Liens
Was thinking of going to a few of these at the courthouse steps from the Trustee Sales Notices................have not done this before but know a friend that picks up a few a yr.
Ok if 1st is foreclosing and the junior lien holders do not show to protect thier $$$.....
Am I correct in assuming that if I then buy it for say $1 buck over the suits (Rep for the 1st) stated bid amount then I get the property free of the junior liens????
Of course not the IRS or County property taxes though.
Have I got this correct?
Explanation appreciated
SKI
Great question, I would like to know the answer to that myself.
Tim
In California at a foreclosure sale. The sale is being conducted by the Trustee for the benefit of the Beneficiary (lender). If there is an overbid above the sum requested by the Beneficiary say $1.00. That bidder having bid the sum necessary to pay the demand of the lst TD Holder now owns the property and the $1.00 goes to the Trustee for the credit of that nice Trustor who just lost his property.
As to liens IRS and Franchise Tax Board. It depends when they were recorded. If junior in time to the First Trust Deed justForeclosured they are eliminated. Thats correct, they are now removed from this title. Of course the liens go chasing after the Trustor who lost the property.
I know what you are thinking, now here is a way to eliminate Federal and State Liens from property. Yes it can be done. Just remember don't be a Klutz and try to get back into the property if you are the old owner. That's a naughty Cheers Lucius
OOOOPs I just forgot. The Property Tax liens (unpaid or due Real Estate Taxes) they stay unpaid and have to be brought up to date. But supose you are working on a limited budget and cannot pay them all at once. Why you set up a five payment plan and pay them over a nice long period of time. In the meantime you market the property. Cheers LUcius
Be careful to investigate the liens on the property though.
if there IRS liens were not removed prior to the foreclosure, it is possible that they will still be valid at time of sale at auction.
do your homework.
So if I hear u correctly ANY line junior and recorded AFTER the 1 st is gone at the trustee sale even if I buy it.
Correct?
SKI
make sure you know, for sure, which is the mortgage being foreclosed. i have seem newbie investors bid at foreclosure and win, be very enthusiastic about it, and then find out that they were bidding on a 2nd or 3rd mortgage. $40-50K later they learn their lesson. If your new to the biz, don't start with courthouse sales!
Try preforeclosures, REOs, or better yet bird dog for a while.
My first experiences with investing in real estate were spent sitting on courthouse steps and wasting hours researching hundreds of properties.
It's a tough game, especially if there is more than one investor bidding for a property. Eventhough you may never see anyone around when that trustee shows up @ 10am, if there is a good deal, they will come.
What happens to the leins on the property depends on state and county laws. Research the title at the courthouse, figure out what is owed. Generally these people are in debt in many other ways. Federal liens are always owed, taxes, county assessments, etc.
I have been the guy who has purchased for a bid of $1 over. It takes almost 2 months before you can even legally step foot in the place, if you don't have to evict that is.
Take my word for it, unless your area is procuring foreclosures where you are gonna have a really nice profit margin and you have 100% cash, go for it, otherwise, find another method of investment. There are much easier ways to make that kind of money in this real estate world.
Joe
I think it works this way as we have discussed in most STATES anyone here familiar with Utah?
SKI
I DO NOT KNOW WHAT STATE YOU ARE IN, BUT IN COLORADO THE OWNERS HAVE 75 DAYS TO REDEEM AND AFTER THAT THE FIRST JUNIOR LIEN HOLDER AS 10 DAYS AND ALL SUBSEQUENT LINORS HAVE 5 DAYS.
IRS LIENS ARE WIPED OUT IF RECORDED SUBSEQUENT THE FORECLOSING LIEN. BUT FEDERAL STATUTE GIVES THEM 180 DAYS TO REDEEM, THIS WOULD BE TRUE IN ALL STATES.