foreclosures can be one of the best ways
to get an incredible deal on a piece of
real estate whether you plan to live in
that property yourself or you plan to
use it for an investment property for
example this is a foreclosure that I
bought and so is this one and this one
and they're all awesome real estate
deals but the world of buying foreclosed
properties can get a little complicated
it's filled with legal jargon and
insider we'll call them
secrets well my name is Brandon Turner
the author of the book on rental
property investing and the host of the
top real estate podcast unearth the
BiggerPockets podcast and in this video
I want to walk you through the process
you need to find and purchase foreclosed
properties and hey if you liked this
video and you want to see more like it
be sure to click that little thumbs up
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Channel all right let's get on with it
now I'm gonna divide or divide this
video into three large chunks or
sections first we're gonna get on the
same page about water foreclosure is and
isn't including the kind of the three
different phases in which you could buy
a foreclosure and second I'm gonna go
and talk about the four different ways
to find for different strategies for
finding foreclosures and then I'm gonna
walk you through the process of making
an offer and making sure you end up with
a killer good deal now before diving too
deep into the details of how to buy it
let's get all on the same page with the
same terms all right a foreclosure is
the process where the lien holder takes
ownership of a property due to a variety
of possible reasons but usually it's the
lack of payment right you don't pay your
bills you get foreclosed on the
foreclosure process differs with every
state but it generally begins with a
bunch of notices are given to the
property owner and then a legal set of
steps leading up to actual foreclosure
or carried out now there's generally
three phases in the foreclosure process
where it's possible to buy a property
there's the pre foreclosure there's at
the courthouse steps at the foreclosure
and then after foreclosure so when
learning how to buy foreclosure it's
important to know what the three phases
are so let me define each first there's
the pre foreclosure phase now it is
possible to buy a home before the
foreclosure actually happens and the
homeowner and before they're kicked out
now buying a property dualist period is
known as the
pre-foreclosure and it's a common
technique used by a lot of real estate
investors and it can be a good way to
find motivated sellers after all few
things in life are more motivating for a
homeowner than knowing they're soon
going to be physically removed from
their property next there is the actual
foreclosure at the courthouse steps you
see in most state states once the legal
process has been carried out and the
property is sent to the county for a
public auction it's done on the
courthouse steps like sometimes
figuratively sometimes actual literally
on the steps and it's sold to the
highest bidder this process is known as
the trustee sale the bidding generally
opens with an automatic starting bid of
whatever amount is owed on the property
so no you're not gonna show up in a bid
$1 on a property in and get it so
whatever they owed on it is where the
bid begins at for example if a home
owner oh to $80,000 on a loan and the
loans secured the property the bidding
would start at 80,000 if no one bids any
higher the lien holder will be awarded
the property and be given the title so
if nobody bids higher than 80 the bank's
gonna take that back at 80 a couple of
years ago I went to a courthouse steps
auction and ended up winning this guy
for just a buck over the opening bid was
around fifteen thousand bucks because
listen no one else showed up to the
auction that was a good day all right
now if you plan to buy a foreclosure at
the courthouse steps here's a few tips
to keep in mind when you buy on the
courthouse steps there may be liens
attached also you probably won't be able
to see the inside of the property
beforehand and the court usually
requires all cash on the day you buy it
so you can kind of rule out getting a
loan on it you know this makes buying
properties on the courthouse steps a
more advanced and maybe risky strategy
that I usually don't recommend for
beginners but hey it works alright so we
covered the pre foreclosure and the
actual foreclosure on the courthouse
steps the third and really honestly
probably the most common phase that most
people talk about when they talk about
they bought a foreclosure that is the
actual post foreclosure phase is the
after the sale on the courthouse steps
the new owner of the property probably
the bank who lent on it unless somebody
bids higher you know they're gonna have
to evict the tenant probably the former
homeowner who might still reside there
now if it's a bank the bank will
generally go through the process
the victim the tenant get the home
listed with a real estate agent to sell
it the remainder of this article I'm
gonna focus on how to buy foreclosure in
this phase the post foreclosure after
it's been filtered through the
foreclosure process and is now available
for sale publicly now when a bank takes
back the property and begins to sell it
the property is known as an REO or a
real estate owned property now it's this
type of real estate deal the REO
properties that I want to spend a lot of
time on because that's what most people
talk about when they're saying
foreclosure specifically let's talk
about how to actually find these as well
the most common source of finding
foreclosures is through the Multiple
Listing Service the MLS now the MLS is a
collection of lists put together by
local real estate agents of all the
properties for sale
in their office now in the old days
these lists were actually kept in file
cabinets and each office faxed them to
each other and made a big list right but
today we've got all the internet they
got the internet so it's all kept there
the MLS is fully accessible for any real
estate agent so if you're not an agent
you should need to either get an agent
or you should become an agent right so
the good thing is the real estate agent
is typically paid for by the seller so
it's free for you right because if
you're buying it doesn't cost any money
however you don't have to just rely on
real estate agents to tell you what
properties are listed you can actually
get a lot of information online through
a lot of different real estate portals
like realtor.com red fin comm Zillow
comm or Trulia com these sites will help
you sift through nearly all the listings
and give you at least some of the
information about the property keep in
mind however these lists can also be
slightly delayed or outdated so in a hot
market you could miss out on some deals
if you're only relying on these real
estate portals all right second you can
buy re o--'s directly from a banks REO
department banks typically have an REO
department somebody that is in charge of
working through those properties now I
said earlier most REO is actually end up
on the MLS but it is possible to make
connections with an REO department at a
bank and have access to properties
before they put on the MLS this is
especially true with smaller community
banks and larger commercial properties
alright third the HUD store you know
some properties have been foreclosed on
by the US housing of US Department of
Housing and Urban Development which is
HUD right
if you get a HUD loan and you get
foreclosed on a lot of times they're put
on the MLS but a lot of times they're
just privately listed on the HUD website
at HUD home store com so be sure to
check that out as well now the fourth
way to find foreclosures foreclosure com
so if we're closure dot-com is a website
that you can find low price to stress to
foreclosures like bank owned homes
government foreclosures like Fannie Mae
Freddie Mac HUD there's pre foreclosures
on there there's REO properties and
foreclosure auctions among other things
so foreclosure calm curates them all
through a membership on their site so if
you're interested in that BiggerPockets
actually has a partnership with them and
we can give our viewers a 7-day free
trial just go to BiggerPockets
dot foreclosure com to start searching
and check it out all right so now you
have some tangible steps on where to
find foreclosures the rest of this video
is gonna go into some more detail on how
to actually buy one of these properties
and make sure you get a great deal so
let's talk about putting in your offer
once you find a property you want to buy
it's time to submit your offer again
this is what a good real estate agent
comes in really handy typically you're
gonna meet with your agent tell them
like let them know the terms you want to
offer how much when are you gonna close
how you gonna finance it your agent will
submit an offer to the seller and
they'll look it over and then they got a
few possibilities first they can accept
it woo I could deny it oh they can
ignore you if it's too low
in other words denying or most common
they could counter you they tell you now
not that but how about this and many
times if there's a lot of offers on a
property the sellers gonna ask you to
submit your highest and best offer in
other words they're saying alright you
know there's a lot of bidding here let's
let's see what you got you know give us
the most you can do now it's easy to
fall into action mode and overpay when
that happens because you allow the
emotion to catch up with you but you
know stick to the numbers keep the
emotion out of it you know that really
brings up a really really important
point here just because something is a
foreclosure does not mean it's a good
deal in fact most of them are not so
it's vital you learn how to analyze a
real estate deal and know exactly how
much you should pay for a property if
you want some help with that be sure to
check out the BiggerPockets
analysis calculators you can analyze a
real estate deal flip rental wholesale
bur in under five minutes and even if
you're brand new to this you can learn a
ton so definitely check it out bigger
pockets that column slash analysis
all right moving on so let's say your
offer gets accepted well now it's time
to do your due diligence and make sure
all your Ducks are in a row this is a
time where you hire an inspector to
check out the property use your
financing fully in place and in most
states the closing process is handled by
a title company who's gonna prepare all
the documents make sure the title is
correct and arrange for the signing of
all the parties however in some states
an attorney is responsible for that your
agent is going to know whether you're an
attorney or a title company state all
right after both parties have signed the
document and the new deed has been
recorded with the local county the
property is now officially yours it's no
longer foreclosure it's your property
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