Real Estate Auction Due Diligence... any advice?

[Walden Ponderer 12,639]

I've found a listing I'm really interested in -- the land is exactly where I want it, with the soil qualities I want, the right mix of forest-to-field, it perks (a huge hairy deal in this part of the country), and has a livable 3-1 house built in the 40s that we can occupy while building the structure we actually want. Enough acreage for the kind of small-scale farming I want to do, but not so many that I can't manage it.

Only catch is, it's a foreclosure, currently owned by the bank, and is part of an online auction. 

We're cash buyers, so that part of the scenario works out great -- being able to show up on auction day, and walk away with a deed is right up our alley. Some folk are nervous about "sight unseen' real estate purchases, too, but honestly, we're okay with bulldozing the house if need be, so it's not like we care if there' foundation problems, or any of those other "usual" hangups on pre-purchase inspection.

However, there's a couple of parts of the equation I'm looking at a little nervously:

-- How can you tell if there's more than one mortgage / lien on a property? Who do you ask?

-- It's occupied. Okay, so that means it's livable. But the seller (bank owned) hasn't disclosed yet whether the person living there is a tenant, or if it's the owner who had been foreclosed on. How can I find out, if they are dragging their feet on updating the auction site?

-- If it's a lease, no biggie. I can afford to wait until the end to occupy the space myself. But if it's the previous owner? I've never had to evict anyone before. What's the procedure? How difficult is it? Who do I ask?

 

I'm thinking if we go this route, I'm going to be talking to a real estate attorney some time in the next few days. But before I pick up the phone, I'd like to make sure I know all the right questions to ask. Anybody ever done anything similar before? What potential roadblocks or headaches do I need to be thinking about?

[Chewbacca 7,780]

Title company can do the mortgage/lien search for you (as well as any easements you will want to know about).  Bank will have to tell you about the tenant.  Nobody else would know, but it's the owner, you can evict after you buy.  

[EZ$ 2,105]

Be sure to check the County property taxes. If they aren’t paying the bank, they probably aren’t paying the taxes. I’ve seen some rookies buy a house at auction with an easy $40k flip profit only to find out that there’s $30k past due on property taxes (which you now owe).  
If the bank has already taken it back, then they should have paid them, but if you are on the courthouse steps, then that could be an issue. 

[Walden Ponderer 12,639]

11 minutes ago, EZ$ said:

Be sure to check the County property taxes. If they aren’t paying the bank, they probably aren’t paying the taxes. I’ve seen some rookies buy a house at auction with an easy $40k flip profit only to find out that there’s $30k past due on property taxes (which you now owe).  
If the bank has already taken it back, then they should have paid them, but if you are on the courthouse steps, then that could be an issue. 

Yeah, the state of the property gave me a pretty strong vibe of "I don't wanna pay my fuckin' taxes"; looks like it got foreclosed on because they weren't willing to do what was necessary to sell when they were still in pre-foreclosure, either, so I won't be surprised if there's some laziness-related unpaid expenses out there. I'm also curious about the bank flipping it immediately to auction. They listed it for sale less than a month ago. Is it usual for them to unload something that quickly? I don't know. I've never looked at this particular market before.

[Walden Ponderer 12,639]

Well, now I'm a creeper and an ass.

Did a little digging -- the previous owner has pretty much gone into a spiral since his wife died (in the house, naturally, which would please my ghost-obsessed wife) two years ago. He's apparently just not held himself together very well since then.

So, am I a vampire for wanting to profit from his misfortune? Or am I just lucky that his misfortune happens to coincide so well with my needs?

I never should have taken that damned ethics class.

[Bevo&Pevo 5,208]

Stick to the code, take all you can and leave nothing for the rest.

[dingleberryswitzer 2,724]

Someone is going to buy it and kick the old man out, might as well be you.  

 

[Chewbacca 7,780]

Well, now I'm a creeper and an ass.
Did a little digging -- the previous owner has pretty much gone into a spiral since his wife died (in the house, naturally, which would please my ghost-obsessed wife) two years ago. He's apparently just not held himself together very well since then.
So, am I a vampire for wanting to profit from his misfortune? Or am I just lucky that his misfortune happens to coincide so well with my needs?
I never should have taken that damned ethics class.

He doesn't own it anymore. The bank does. That's not your fault.

[XYZ 2,154]

19 hours ago, Walden Ponderer said:

it perks (a huge hairy deal in this part of the country),

What does that mean?

[Catpfish 618]

36 minutes ago, XYZ said:

What does that mean?

It means that the ground has sufficient absorption for a septic system

[TwiceHorn 31,510]

Pretty good advice here.  Assuming NC does the title insurance deal (some states don't), engaging a title company to provide a title policy will uncover most of the things you're concerned about, because those things (liens, taxes, etc.) would impact most title policies.

I suppose the title policy might cover and the title company advise regarding any right of redemption in NC law.

[Walden Ponderer 12,639]

2 hours ago, XYZ said:

What does that mean?

It's the single most important question in this part of the country, because the clay soils are so thick. The plus side, though, is that if you want to put in a pond, all you have to do is dig a hole, and wait.

[Judge Roybeanbag 11,819]

11 hours ago, Catpfish said:

It means that the ground has sufficient absorption for a septic system

And burying the previous owners body after you “evict” him.

[StruggleBus 3,922]

What kind of farmer? Cuz if you ain’t milking cows, you ain’t no farmer. 

[horn4life 3,768]

Here's the part I'm confused about, you said the bank listed it a month ago? And now is putting it out to auction via Auction.com or some similar site, correct? Well the odds are there is going to be a "reserve" price the bank will insist upon getting, before allowing a bid to go forward. If the property was listed, you can find the listing price using any of the online sites like realtor.com or zillow. The bottom line is that whatever the property was listed for, there were no offers deemed acceptable to the bank. One opportunity you missed was making a low offer on the house and seeing what the bank would accept. You could make multiple offers creeping up for example, if you have an agent willing to repeatedly do the offer paperwork. The big advantage you lose at auction that had you made an accepted offer to the bank off a listing, you get a few days to inspect the property, and potentially terminate the offer if you find something that makes you want to back out. You are mainly interested in the land so what you need to figure out is what is YOUR top dollar worth of said property. You need to factor in that you are going to own the place and you will be the one removing the old man. Or directing the Constable to remove him to be more accurate.

Something that made me take theREO(Real Estate Owned) option with no tenant on site. Paying a little more for peace of mind of no cracked slap or cement in the plumbing was worth a couple grand to me.  IF you haven't registered for the auction site, as you usually get a tiny bit more information at that point. Usually they specify the type of title being conveyed. But on your original questions. 1) There are no other mortgages as the bank eliminated any non first position mortgages with their repossession. 2) you know about the old man, but it's NOT your fault. Unless some relative buys the place at auction to save him, he's out of there no matter what. If you get a great deal you can always toss a couple grand at the old guy to get his stuff out intact and move him out. 3) ones you did not ask- Is there any buyer's premium to auction site from the purchaser? 4) Is the bank picking up the 10 month's of taxes for 2019? 

The one thing I would do is to do the research via the county clerk about what the original mortgage amount was and see if anything negative was recently recorded (doubtful with bank owning.) Sometimes detailed information regarding interest rate as well as total borrowed can be found here. The clerks will help you usually. You can do the math and have a pretty good idea what the bank has into it. That math and the MLS listing price should allow you to make a decent guess as to what an acceptable offer might be to the bank. If you do this right you will have a very good idea of what the bank's reserve is likely to be. Remember this property already was auctioned, and nobody bid as much as the bank was owed. It was also listed and not sold for the amount the bank wanted for it.

My guess is gonna be that the bank wants too much and again the property will go unsold due the amount they want for it. Whatever that amount is has been tested twice in the marketplace, and either they are going to lower that amount or need a new bidder (like you). The fact you are looking at this as your future homestead makes the amount you might be willing to pay likely higher than any investor with a brain would be willing to pay. So you might actually end up being the high bidder in a situation like this. Just make sure that you account for all your potential costs in your bid. 

Good luck! I will be curious to see what the reserve comes in at. 

Edited November 1, 2019 by horn4life

[Bevo 13,582]

I don't know anything about this stuff, but I enjoy reading it. Maybe one day the info will come in handy.

[davidg 4,038]

13 hours ago, StruggleBus said:

What kind of farmer? Cuz if you ain’t milking cows, you ain’t no farmer. 

What if he milks cats?

[Bevo 13,582]

7 minutes ago, davidg said:

What if he milks cats?

Maybe that is what Ted Nugent was singing about. 

[StruggleBus 3,922]

19 minutes ago, davidg said:

What if he milks cats?

I'll allow it

[TwiceHorn 31,510]

2 hours ago, horn4life said:

Here's the part I'm confused about, you said the bank listed it a month ago? And now is putting it out to auction via Auction.com or some similar site, correct? Well the odds are there is going to be a "reserve" price the bank will insist upon getting, before allowing a bid to go forward. If the property was listed, you can find the listing price using any of the online sites like realtor.com or zillow. The bottom line is that whatever the property was listed for, there were no offers deemed acceptable to the bank. One opportunity you missed was making a low offer on the house and seeing what the bank would accept. You could make multiple offers creeping up for example, if you have an agent willing to repeatedly do the offer paperwork. The big advantage you lose at auction that had you made an accepted offer to the bank off a listing, you get a few days to inspect the property, and potentially terminate the offer if you find something that makes you want to back out. You are mainly interested in the land so what you need to figure out is what is YOUR top dollar worth of said property. You need to factor in that you are going to own the place and you will be the one removing the old man. Or directing the Constable to remove him to be more accurate.

Something that made me take theREO(Real Estate Owned) option with no tenant on site. Paying a little more for peace of mind of no cracked slap or cement in the plumbing was worth a couple grand to me.  IF you haven't registered for the auction site, as you usually get a tiny bit more information at that point. Usually they specify the type of title being conveyed. But on your original questions. 1) There are no other mortgages as the bank eliminated any non first position mortgages with their repossession. 2) you know about the old man, but it's NOT your fault. Unless some relative buys the place at auction to save him, he's out of there no matter what. If you get a great deal you can always toss a couple grand at the old guy to get his stuff out intact and move him out. 3) ones you did not ask- Is there any buyer's premium to auction site from the purchaser? 4) Is the bank picking up the 10 month's of taxes for 2019? 

The one thing I would do is to do the research via the county clerk about what the original mortgage amount was and see if anything negative was recently recorded (doubtful with bank owning.) Sometimes detailed information regarding interest rate as well as total borrowed can be found here. The clerks will help you usually. You can do the math and have a pretty good idea what the bank has into it. That math and the MLS listing price should allow you to make a decent guess as to what an acceptable offer might be to the bank. If you do this right you will have a very good idea of what the bank's reserve is likely to be. Remember this property already was auctioned, and nobody bid as much as the bank was owed. It was also listed and not sold for the amount the bank wanted for it.

My guess is gonna be that the bank wants too much and again the property will go unsold due the amount they want for it. Whatever that amount is has been tested twice in the marketplace, and either they are going to lower that amount or need a new bidder (like you). The fact you are looking at this as your future homestead makes the amount you might be willing to pay likely higher than any investor with a brain would be willing to pay. So you might actually end up being the high bidder in a situation like this. Just make sure that you account for all your potential costs in your bid. 

Good luck! I will be curious to see what the reserve comes in at. 

I didn't read that it had been listed other than for purposes of the auction.  I'm not sure I would read too much into failing to attract a bidder at a foreclosure auction, there's all kinds of reasons for that.  

But, trying to suss out what the bank has into it, if doable, is good advice.

Also, you'd have to ask a NC lawyer, but in most places, eviction is intended to be a summary (meaning quick and relatively pain-free) procedure that is "doable" by pro-se landlords.  In some of your more liberal jurisdictions, it has become a colossal pain in the ass.

It involves these basic things:  a default or the termination of a tenancy (if he's a holdover tenant or tenant at will), notice of the default or termination to the tenant prior to filing, filing an eviction petition or complaint, a court hearing to establish that the default or termination occurred and hasn't or can't be cured, an order of eviction with a certain period for compliance, and forced removal if that period expires.

Also, it appears that all foreclosures in NC are "judicial," meaning there's a court hearing to authorize the foreclosure sale.  You should be able to look that up fairly easily at the courthouse and probably find precisely the original loan amount and indebtedness on it at the time of foreclosure.  Add $10-25k in foreclosure costs and carrying costs (more the longer the bank has held it) and you have a pretty good idea what the bank has in it.

[Player 4,575]

On 10/30/2019 at 5:46 PM, Walden Ponderer said:

Well, now I'm a creeper and an ass.

Did a little digging -- the previous owner has pretty much gone into a spiral since his wife died (in the house, naturally, which would please my ghost-obsessed wife) two years ago. He's apparently just not held himself together very well since then.

 

Good luck evicting that guy. He's a nut. 

[Gil Bang 25,980]

here's a csb about a guy that was losing his house; I was not involved in this scam.

Guy's house is going to foreclosure auction.  It's worth a lot more than the bank is owed, so it will be of interest to lots of bidders.  There are a few junior lienholders in line to collect from the auction proceeds as well. 

The auction is a few weeks away, so the property owner gets a shady real estate agent to list the home on the MLS.  Property description says that the septic system is bad, there are major foundation issues, there was a kitchen fire and the kitchen is destroyed, and there is extensive termite damage.  They include photos showing these conditions.  Of course, the photos were stolen from homes that actually had these issues. 

The home in question was pristine. 

Anyway, of course the prospective buyers did their research, and came across all of the "problems" with the house, so the only bidder that showed up at the auction was the owner's buddy, the straw buyer.   House went cheap at auction, junior liens were wiped out, and the shady owner lived happily ever after in his house.

[Updawg 2,276]

Maybe you can keep the.old man around as a ranch hand.

[Bevo 13,582]

2 hours ago, Gil Bang said:

here's a csb about a guy that was losing his house; I was not involved in this scam.

Guy's house is going to foreclosure auction.  It's worth a lot more than the bank is owed, so it will be of interest to lots of bidders.  There are a few junior lienholders in line to collect from the auction proceeds as well. 

The auction is a few weeks away, so the property owner gets a shady real estate agent to list the home on the MLS.  Property description says that the septic system is bad, there are major foundation issues, there was a kitchen fire and the kitchen is destroyed, and there is extensive termite damage.  They include photos showing these conditions.  Of course, the photos were stolen from homes that actually had these issues. 

The home in question was pristine. 

Anyway, of course the prospective buyers did their research, and came across all of the "problems" with the house, so the only bidder that showed up at the auction was the owner's buddy, the straw buyer.   House went cheap at auction, junior liens were wiped out, and the shady owner lived happily ever after in his house.

That seems like a pretty effective scam. However, I guess a lot of things had to go right for it to work. The guy had to hope that the bank didn't put a minimum price on the auction. The guy had to hope that the bank or the lienholders didn't see the fake listing. The guy had to hope that his buddy would turn the home over to him. And the guy had to hope that no interested parties went to the house to confirm its condition.

[Dbeasy 15,073]

here's a csb about a guy that was losing his house; I was not involved in this scam.
Guy's house is going to foreclosure auction.  It's worth a lot more than the bank is owed, so it will be of interest to lots of bidders.  There are a few junior lienholders in line to collect from the auction proceeds as well. 
The auction is a few weeks away, so the property owner gets a shady real estate agent to list the home on the MLS.  Property description says that the septic system is bad, there are major foundation issues, there was a kitchen fire and the kitchen is destroyed, and there is extensive termite damage.  They include photos showing these conditions.  Of course, the photos were stolen from homes that actually had these issues. 
The home in question was pristine. 
Anyway, of course the prospective buyers did their research, and came across all of the "problems" with the house, so the only bidder that showed up at the auction was the owner's buddy, the straw buyer.   House went cheap at auction, junior liens were wiped out, and the shady owner lived happily ever after in his house.

At least there is plenty of evidence to file a lawsuit and possibly also a criminal case.

[Bevo 13,582]

Gil Bang,

I can't quite remember what you do. Are you a mortgage lender for a bank in LA? I don't remember you being a residential or commercial real estate agent. Are all your projects in the LA area or do you do stuff up north towards Santa Barbara and east towards Calaveras County and Lake Tahoe?

[SquishMitten 10,420]

here's a csb about a guy that was losing his house; I was not involved in this scam.
Guy's house is going to foreclosure auction.  It's worth a lot more than the bank is owed, so it will be of interest to lots of bidders.  There are a few junior lienholders in line to collect from the auction proceeds as well. 
The auction is a few weeks away, so the property owner gets a shady real estate agent to list the home on the MLS.  Property description says that the septic system is bad, there are major foundation issues, there was a kitchen fire and the kitchen is destroyed, and there is extensive termite damage.  They include photos showing these conditions.  Of course, the photos were stolen from homes that actually had these issues. 
The home in question was pristine. 
Anyway, of course the prospective buyers did their research, and came across all of the "problems" with the house, so the only bidder that showed up at the auction was the owner's buddy, the straw buyer.   House went cheap at auction, junior liens were wiped out, and the shady owner lived happily ever after in his house.

That bank’s attorney really fucked up not setting a minimum bid. And then not going for a deficiency judgment. And not doing any fucking research before or after the sale. Sounds like they need new representation. I know a guy...just sayin. Hit me up!

[Gil Bang 25,980]

On 11/4/2019 at 6:01 PM, Bevo said:

Gil Bang,

I can't quite remember what you do. Are you a mortgage lender for a bank in LA? I don't remember you being a residential or commercial real estate agent. Are all your projects in the LA area or do you do stuff up north towards Santa Barbara and east towards Calaveras County and Lake Tahoe?

I have a few irons in the fire.  As to Real Estate, I'm a realtor in North San Diego County.   I've been a commercial loan guy in the past, and a construction loan guy for decades.   When I was a construction lender, I had clients in Santa Barbara, but I haven't done anything up there in years, other than visit for a getaway. 

[Walden Ponderer 12,639]

We're halfway through the online auction now, and I'm ridiculously nervous. I have a proxy bid in, so I know it hasn't hit my limit yet. Also hasn't hit the reserve amount, so I'm wondering now, if no one else bids before closing of the auction, should I bump up my bid to hit the reserve amount? Or risk getting turned down?

I know the amount of the loan that got foreclosed on -- it's roughly $30,000 less than the tax appraisal and roughly $150,000 less than the estimated resale value. Is the reserve likely to be closer to the one than the other?

[Walden Ponderer 12,639]

Well, shit. I've jinxed myself. Still below my limit, but over reserve. I'm willing to bet I'll be outbid when it's all said and done.

[StruggleBus 3,922]

What's your limit? 

[El Diablo 4,232]

'bout tree fiddy?

[Walden Ponderer 12,639]

19 minutes ago, StruggleBus said:

What's your limit? 

Less than all I've got, but more than I want to spend.

[NeverMarryAStripper 21,909]

3 hours ago, StruggleBus said:

What's your limit? 

You're bidding against him aren't you

[Walden Ponderer 12,639]

19 hours ago, NeverMarryAStripper said:

You're bidding against him aren't you

Well, somebody is. It's an online auction, and it's over in about 45 minutes.

[horn4life 3,768]

Unless it's an adjactent land owner most investors aren't going to go much past 50% of value.  Now appraised value and future weed growing value are two different things.  If reserve is met it is going to sell. For you I would think that low 100's would still be a great price for you.   

[horn4life 3,768]

I might make one more bid to see if they counter. . Are you creeping up thousand by thousand? Then maybe add $5K and see how fast they counter?

I time how fast the bid is accepted on the website and plan a last second bid. My Ebay method, your best highest offer, that you hope they do not have time to counter before the bid closes!

Edited November 7, 2019 by horn4life

[Walden Ponderer 12,639]

Holy shit.

 

I won. I'm kinda laughing over "future weed growing value" because I guarantee you, as soon as it's legal in NC, I'm growing cannabis. But in the meantime, we'll be a "pick your own" berries, eggs, goat cheese, and honey outfit.

And to think, three months ago, I lived in the armpit of the universe.

 

We ended up at about $90k below resale estimate, so if I were a flipper, I'd have been almost as happy about this sale as I am as a plain ol' buyer -- even without the house on it, we'd still have come out at roughly $10k per farmable acre. Which in the piedmont, is insanely low priced.

Edited November 7, 2019 by Walden Ponderer

[StruggleBus 3,922]

When's the farm party with kegs and strippers

[Dbeasy 15,073]

Keep us up to date on whether there are any surprises. I’m fascinated by this.

[Walden Ponderer 12,639]

1 hour ago, Dbeasy said:

Keep us up to date on whether there are any surprises. I’m fascinated by this.

Will do. I'm fascinated, too.

1 hour ago, StruggleBus said:

When's the farm party with kegs and strippers

Ain't no party like an Amish farm party.

[zork 629]

On 11/7/2019 at 5:15 PM, Walden Ponderer said:

Will do. I'm fascinated, too.

Ain't no party like an Amish farm party.

She has a nice grip.

Was it on auction.com or just some local county courthouse list or what?

What methods, if you don't mine sharing, did you employ to do your creeping and/or fact finding about the property before the auction?

Anything you would do differently next time, given you are only barely into the final stages of this one of course.

[Walden Ponderer 12,639]

19 hours ago, zork said:

She has a nice grip.

Was it on auction.com or just some local county courthouse list or what?

What methods, if you don't mine sharing, did you employ to do your creeping and/or fact finding about the property before the auction?

Anything you would do differently next time, given you are only barely into the final stages of this one of course.

Yeah, it was auction.com; after talking to our local real estate folk (including a paralegal who used to be a realtor), we found the right online sources for the county in question, and basically did all the same work the title company was doing. I don't begrudge paying the title company, though, because doing the same work, I can be sure neither of us missed anything important. Anyway, we dug through all the filings related to this property, and were shocked to find that all the previous owner's bankruptcy related filings were also available, which was helpful, because it showed us that while there had been an additional lien on the property, the current owner (the bank who foreclosed) had actually assumed those debts and paid them already.

The reserve turned out to be the value of the two liens, and we ended up bidding several thousand more than that, but still way less than the estimated resale value.

Now for the interesting part -- North Carolina has a unique 10 day "dead period" where the original owner (the foreclosed-upon party) has a chance to match our offer, provided they can come up with the cash to do so. What that means in practical terms for us is very little, since there is virtually zero chance this particular previous owner even wants to do that, let alone could. It is definitely something for other North Carolina buyers to watch for, though, because in different circumstances, I could see somebody overturning a sale at the last minute.

Anyway, I think this is a great way to get property, but you absolutely need to be ready to do research in a hurry. We only had three days between when we decided we wanted it, and when we had to know for sure how much we could risk bidding on it, given what we knew about the state of the property, and the likely related expenses uncovered in our research.

[TwiceHorn 31,510]

The place where this all falls apart is this:  most people who let a home go to foreclosure haven't owned it very long.  Therefore, there is little equity in the home and the loan balance plus costs comes close to the value of the property.  So the bank can "outbid" most at the actual foreclosure sale, and will have a high reserve at any subsequent auction.

The key to finding advantageous foreclosures is someone who has owned the property for a long time, or made a large downpayment, so the loan balance at foreclosure is substantially less than the value of the property and the bank can be outbid or is willing to let it go at that.  As you note, it takes some work to discover this.  And in a state like Texas, where it's impossible to find a loan amount without insider help, virtually undoable.

I assume the judicial nature of the foreclosure process in NC, and the bankruptcy (requires stating balance on all debts) helped a lot.

The other way is properties that have appreciated significantly since the loan.  But those are easier to spot ("hot neighborhoods") and attract more bidders.  Highly speculative bidness there.

[Walden Ponderer 12,639]

16 hours ago, TwiceHorn said:

The place where this all falls apart is this:  most people who let a home go to foreclosure haven't owned it very long.  Therefore, there is little equity in the home and the loan balance plus costs comes close to the value of the property.  So the bank can "outbid" most at the actual foreclosure sale, and will have a high reserve at any subsequent auction.

The key to finding advantageous foreclosures is someone who has owned the property for a long time, or made a large downpayment, so the loan balance at foreclosure is substantially less than the value of the property and the bank can be outbid or is willing to let it go at that.  As you note, it takes some work to discover this.  And in a state like Texas, where it's impossible to find a loan amount without insider help, virtually undoable.

I assume the judicial nature of the foreclosure process in NC, and the bankruptcy (requires stating balance on all debts) helped a lot.

The other way is properties that have appreciated significantly since the loan.  But those are easier to spot ("hot neighborhoods") and attract more bidders.  Highly speculative bidness there.

That's all pretty spot on. We were unquestionably lucky in a half dozen ways. Previous owner had been on the property for close to 30 years; had taken out a 2nd mortgage on just part of the value of the land after having paid off the old one; went into bankruptcy, and we got full disclosure on all his financial particulars, and some of the particulars of the bank, too.

Not sure that's an easily replicatable set of circumstances, and for it to be related to a piece of property we'd actually want to own, to boot, because just finding the property you want is hard enough, without also having to have Lady Luck shine on the proceedings, too.

[horn4life 3,768]

Glad to hear it all worked out for you... or at least so far. As far as the 10 day hold, that's no biggie like 99.5% of the time.  IF that does happen it usually meant their was some sort of last minute legal paperwork or payment made that didn't make it to the auctioneer in time to pull the property. Anytime the bank owns it they have wiped out the liens on the property, that's the advanatage of an REO Auction. You get a clear title. A

Only thing i might suggest at this point is getting a survey of the property since it sounds like you are getting title insurance anyhow. Mainly just to make sure that you would be aware of any fence lines that might be in the wrong place. 

I figured you had a darn good chance since you wanted to live there.  Awesome you are $90K under value before adding additional value with a new home (or heavily remodeled and added onto) which should increase the value even further.  I knew deep down it was a weed play... 😉

 

[horn4life 3,768]

Project 2 (Clay County, N. Carolina): Mitsubishi MR SLIM – Outdoor Units (2): MXZ-8B48NA – Indoor Units: SEZ-KD12NA4 (1), SEZ-KD15NA4 (1), SEZ-KD18NA4 (1), PEAD-A24AA (1)

Saw this image looking at split ductless mini AC systems.  Since you mentioned Clay in the soil I wondered if this nicely secured unit is representative of the area in which you made your purchase? County description seems like it might be a match?

[Bevo 13,582]

Did you have to have the cash on hand or were you able to finance?

[horn4life 3,768]

For auction it's cash.

Now once he owns it he can refinance. I would try to work with a local bank, and get a construction loan to improve the existing structure, likely adding a master and master bath. Likely the most cost effective way to update the home. A 3-2 is gonna 10 times as fast as any 3-1 is ever going to. Community banks are more flexible in their lending requirements and that is where I would be looking to build a relationship. 

[Walden Ponderer 12,639]

It's all cash. I went ahead and hired the best local real estate lawyer I could find for the closing -- I had thought about avoiding it altogether, but we saved so much on the price, that it's worth it to me to throw a few extra thousand at making sure there's no loose ends. I asked him about the survey, and he doesn't think it's really necessary -- one side of the property is the only one currently fenced, and that's the county's utility access strip; our property borders a pond on that side, anyway, so the fence (and the line) are anywhere from 5-10 feet out in the water, depending on how much rain there's been.

We're in Orange County, NC.  Kinda hard to tell from that photo, is that mulch? Or soil? The soil is a bit lighter colored clay than that, not nearly as red as, say, Georgia, or even closer to the coast here in NC. Once I'm done with my hugelkultur, though, it's gonna be bark-brown and mighty fertile. 

 

Edit:  I just googled "Clay County, NC" and yowsa, that's the-middle-of-nowheresville, up in the mountains. I wouldn't mind going camping there, but I don't think I could live there.

Edited November 15, 2019 by Walden Ponderer