Latest / Results Driven / Episode 173: Most Investors Walk Away From These Foreclosure Deals. Here’s Why We Don’t

Transcript

Episode 173: Most Investors Walk Away From These Foreclosure Deals. Here’s Why We Don’t · Results Driven

• 0:00
  SPEAKER_01: So, what we do is when that seller calls in days after the auction, we explain to them that we've helped dozens of people through this exact same process.
• 0:08
  SPEAKER_01: Now, between you and me, these are some of our biggest deals.
• 0:10
  SPEAKER_01: And this is why I love this strategy.
• 0:11
  SPEAKER_01: See, at this point, the seller doesn't have a whole lot of options.
• 0:14
  SPEAKER_01: So if they want to put cash in their pocket, then they're going to be incentivized to work with us.
• 0:18
  SPEAKER_01: So what we do is we get a purchase agreement signed by the seller.
• 0:22
  SPEAKER_01: Okay, this is where we agree upon price.
• 0:30
  SPEAKER_00: Are you a driven real estate investor tired of inconsistent deal flow and ready to scale your business?
• 0:36
  SPEAKER_00: I'm Tiffany High.
• 0:37
  SPEAKER_01: And I'm Josh High.
• 0:38
  SPEAKER_00: And this is the Results Driven Podcast, where we share proven strategies to build systems, master sales, grow your team, and create a self-sustaining business with predictable income.
• 0:50
  SPEAKER_00: Whether you're a one-person operation or building a team, our mission is to give you the tools, support, and mindset shifts you need to succeed.
• 0:58
  SPEAKER_00: Let's dive in.
• 1:03
  SPEAKER_01: What if I told you some of our biggest deals came after the foreclosure auction?
• 1:08
  SPEAKER_01: Most real estate investors think that once the property goes to foreclosure and it's auctioned off, the opportunity is gone.
• 1:13
  SPEAKER_01: That's exactly why they miss some of the best deals.
• 1:16
  SPEAKER_01: If you're an investor in Ohio, this strategy could completely change how you look at foreclosures.
• 1:22
  SPEAKER_01: And the truth is, if you're an investor in any state that is a judicial state that has right of redemption, you could leverage this.
• 1:29
  SPEAKER_01: Today, I'm going to show you how we buy properties after they've already gone through the foreclosure process and auction using Ohio's redemption process, the exact steps we follow, and why this strategy has led to multiple six-figure deals in our very own business.
• 1:45
  SPEAKER_01: So let's zoom out and look at the foreclosure process in a judicial state from a 10,000-foot view.
• 1:50
  SPEAKER_01: If you look at someone going delinquent, they miss their first payment.
• 1:55
  SPEAKER_01: 30 days later, they get their first of what they call the 30, 60, 90-day notice of defaults.
• 2:00
  SPEAKER_01: Also, you'll see it abbreviated as NOD, 3060-90 NOD, which is notice of default.
• 2:05
  SPEAKER_01: By day 120, then a lawsuit or a complaint is filed against the homeowner from the bank or whoever's filing the foreclosure.
• 2:14
  SPEAKER_01: This starts the foreclosure process and the length can vary.
• 2:18
  SPEAKER_01: So after a period of time, though, going through this process and the courthouse and the attorneys doing their thing, then eventually they get to a point where there is an auction sale scheduled.
• 2:29
  SPEAKER_01: It is mandatory in the state of Ohio that that sale has a public notice.
• 2:33
  SPEAKER_01: That date has to have a public notice six weeks prior to the auction.
• 2:37
  SPEAKER_01: Now, after the property goes to auction, obviously you have investors that are bidding on it.
• 2:42
  SPEAKER_01: They award a highest bidder, but the property does not transfer in that moment.
• 2:48
  SPEAKER_01: That buyer who bid at the auction has to wait until the courts give them what's called the confirmation of sale.
• 2:55
  SPEAKER_01: Now, the general rule of thumb in the state of Ohio is that there's approximately 30 days that this can happen.
• 3:01
  SPEAKER_01: Now, savvy auction buyers will push the courts to confirm the sale sooner.
• 3:06
  SPEAKER_01: I've seen it happen as soon as 17 days.
• 3:08
  SPEAKER_01: Generally, it's longer than 20.
• 3:10
  SPEAKER_01: I've seen it take even upwards of six weeks.
• 3:14
  SPEAKER_01: All depends upon the courthouse and how quickly they're able to move things along based on their capacity and the current activity and/or work that they have that they're working on.
• 3:23
  SPEAKER_01: Now, go back to six weeks before the auction.
• 3:28
  SPEAKER_01: Notices given for the public to know that this property at this address is going to be auctioned.
• 3:33
  SPEAKER_01: Oftentimes, this is where real estate investors are hounding these sellers.
• 3:38
  SPEAKER_01: And oftentimes, sellers reach acceptance when it's too late or when investors think that it's too late.
• 3:44
  SPEAKER_01: They reach acceptance after the property has been auctioned.
• 3:47
  SPEAKER_01: There's been a highest bidder awarded.
• 3:49
  SPEAKER_01: And now we're days after the auction, a seller calls in and says, Hey, my house was just auctioned.
• 3:54
  SPEAKER_01: I need to do something.
• 3:55
  SPEAKER_01: Can you help me?
• 3:56
  SPEAKER_01: Most investors at this point in time say, wait, hold on, your house is already auctioned.
• 4:00
  SPEAKER_01: I'm sorry, I can't do anything.
• 4:01
  SPEAKER_01: Well, in the state of Ohio, there's a 30-day rite of redemption.
• 4:04
  SPEAKER_01: And what does that mean?
• 4:05
  SPEAKER_01: That means that the seller has 30 days, or said differently, this is actually how it works.
• 4:10
  SPEAKER_01: It's not 30 days, you have until the courts confirm the sale.
• 4:14
  SPEAKER_01: And remember, I said it could happen as quick as 17 days.
• 4:16
  SPEAKER_01: I've seen it happen that quick, but generally it's 20 days or later.
• 4:19
  SPEAKER_01: So we've got to move with speed.
• 4:21
  SPEAKER_01: So what we do is when that seller calls in days after the auction, we explain to them that we've helped dozens of people through this exact same process.
• 4:29
  SPEAKER_01: Now, between you and me, these are some of our biggest deals.
• 4:31
  SPEAKER_01: And this is why I love this strategy.
• 4:33
  SPEAKER_01: See, at this point, the seller doesn't have a whole lot of options.
• 4:35
  SPEAKER_01: So if they want to put cash in their pocket, then they're going to be incentivized to work with us.
• 4:40
  SPEAKER_01: So what we do is we get a purchase agreement signed by the seller.
• 4:44
  SPEAKER_01: Okay, this is where we agree upon price.
• 4:46
  SPEAKER_01: Now, the next thing that we do is we go to the title company, we rush a title search.
• 4:50
  SPEAKER_01: The reason why we do that is because there could be other liens like solar panels or IRS liens or other tax liens, mechanics liens.
• 4:57
  SPEAKER_01: We need to make sure that everything's gonna be free and clear and that that property has the type of equity that we think that it has.
• 5:03
  SPEAKER_01: That way, by the time they go through payoff and then payoff of any liens, it's not greater than our purchase agreement price.
• 5:10
  SPEAKER_01: Once we confirm that that is not the case, that's not gonna happen, then what we do is we get a cashier's check, it's our check.
• 5:17
  SPEAKER_01: We take that, this is for the payoff of the mortgage, okay, or whatever the foreclosure is.
• 5:22
  SPEAKER_01: It could be a tax foreclosure, so that whatever that tax bill is, or the tax payoff, or the mortgage payoff.
• 5:27
  SPEAKER_01: We find out what an estimated payoff is from our title company, we get a check for that amount plus a few thousand dollars because we don't want to go back and forth about a couple hundred dollars delaying this process.
• 5:37
  SPEAKER_01: We get a cashier's check, and at the same time we have the seller sign a mortgage and promissory note that we will then record.
• 5:44
  SPEAKER_01: Okay.
• 5:44
  SPEAKER_01: The reason why we do this is because this check is gonna go pay off that mortgage company.
• 5:48
  SPEAKER_01: And our protection of this seller changing their mind or trying to sell to someone else is that we now have a lien, our own lien for the mortgage that we fronted that we took then to the courthouse.
• 5:59
  SPEAKER_01: Okay, so the mortgage protects us, we've got this cashier's check, we've got to take it to the clerk of courts.
• 6:04
  SPEAKER_01: The clerk of courts then is going to give us a receipt.
• 6:08
  SPEAKER_01: Now we have to have a reference number for the case.
• 6:11
  SPEAKER_01: When we do that, we say this check is for this case number for this property that was foreclosed on.
• 6:17
  SPEAKER_01: This is gonna save the property from going through, and this check at the clerk of courts will stop the confirmation of sale.
• 6:24
  SPEAKER_01: Now, when we get that, we get a receipt from the clerk of courts, and we take that receipt to the treasurer's office where we then hand it to them and they file that.
• 6:34
  SPEAKER_01: Now, the seller has to get an attorney, and uh oftentimes some of our resources have arm's length or third-party attorneys that are willing to help in our experience and helping sellers through this redemption process.
• 6:46
  SPEAKER_01: So that attorney goes and represents the seller and files what's called a motion to stay.
• 6:52
  SPEAKER_01: Right?
• 6:52
  SPEAKER_01: They file that with the clerk of courts.
• 6:54
  SPEAKER_01: So the clerk of courts at this point has cashier's check for the whole payoff, plus an attorney who's now filed a motion to stay and redeem the property.
• 7:03
  SPEAKER_01: There could take, you know, four, six, even maybe seven weeks for the courthouse to and the attorney to do their thing and they get the motion granted to stay and redeem the property.
• 7:14
  SPEAKER_01: And the moment that that motion is granted, well, typically 24 to 48 hours after that, we are then able to close because now we have a free and clear title, the foreclosure has been dropped, the seller has redeemed the property.
• 7:26
  SPEAKER_01: Our mortgage is still recorded against the property.
• 7:30
  SPEAKER_01: And so, just like any other transaction, the way that this works at closing is that there's going to be a payoff, and that becomes basically a refund to us.
• 7:38
  SPEAKER_01: So if the payoff was$150,000 and we're buying the property for$200,000, we're bringing the additional$50,000 to close because of that payoff being a line item that gets refunded to us as the lender at closing.
• 7:51
  SPEAKER_01: This is how we're able to work through these deals.
• 7:53
  SPEAKER_01: And guys, I'm telling you, this is an absolute game changer.
• 7:56
  SPEAKER_01: Some of our biggest and some of our best deals have come from leveraging this strategy.
• 8:00
  SPEAKER_01: So if you're investing in Ohio and you come across a foreclosure or redemption deal that you need help with, reach out to us.
• 8:06
  SPEAKER_01: We actively partner with investors throughout Ohio on the right opportunities.
• 8:10
  SPEAKER_01: And if you want to learn more strategies like this and ask us your questions directly, join Tiffany and I in our free school community.
• 8:17
  SPEAKER_01: We go live every single week and we share the exact systems and processes that we're using to find, analyze, negotiate, and close deals inside our very own real estate investing business.
• 8:26
  SPEAKER_01: It's completely free.
• 8:28
  SPEAKER_01: We'll put the links in the description below and we'll see you inside.
• 8:32
  SPEAKER_00: This episode has come to an end, but your journey continues.
• 8:36
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• 8:39
  SPEAKER_00: If you want direct help from us, join our free community by visiting the results driven podcast dot com.
• 8:46
  SPEAKER_00: That's the results driven podcast dot com.
• 8:49
  SPEAKER_00: We'll see you next time on the results driven podcast.
• 8:52
  SPEAKER_01: We'll see you next time on the results driven podcast.