Atlanta REI

Monday, June 05, 2006

House #3 - REO?

On Friday I was digging in a little more on house #3. I had pulled the tax records to see how much the owner had paid for the property. According to the tax records the bank actually owns the property. To my surprise I discovered that the bank had already foreclosed on the property. Immediately I called my agent to see if this was true. She said she had no idea. She said that the seller lives in New York and she had instructed the seller to make sure that she had changed the mailing address, so maybe the seller isn't even aware that the property has been foreclosed on.

Unfortunately, the foreclosure auction in Georgia is this Tuesday, so my agent usually goes underground the weekend before the auction trying to get last minute deals done with the banks. (If you remember, my Duluth deal went through the weekend before the auction.) Therefore, she would not be able to focus on my deal until Tuesday.

That's not a problem because her and I were under the understanding that this deal was not due to be foreclosed on for at least another month or so. If it has already been foreclosed, then we will make an offer to the bank (which we sort of already did, but the contract is between the seller and I not the bank). Interestingly enough, I did ride by the property on Sunday and my agent's sign is still in the front yard. So, if it did foreclose in April (like the tax record says) and they listed it with an agent, I wonder why they have not secured the property yet? They also have yet to put their sign in the front yard. Something does not make sense here. The good news is that the owner paid $88K back in 2000 for the property. With strong comps selling in the $110's and an average 5% appreciation a year added to the purchase price of $88k I feel real good about my ARV.

If I were a betting man, (and I am) I would say this house is LONG GONE!!!!

Ohhhhhhhhh....on second thought, what if this is one of those scams. Where a person has found a house to be foreclosed, is pretending to be the owner, and is hoping some newbie investor who does not do their due diligence, shows up with cash and buys the property.

Scenario:

Seller: My house is in foreclosure please help me!!!!!

Investor: Ok I'll help. Let's do a subject - to deal. How much cash do you need?

Seller: I need $5,000.

Investor: Ok I'm too cheap to hire an attorney to do a title search and handle the closing for me. Just sign this quit claim deed to me and I will give you $5,000 and start making your payments.

Seller: Ok thanks for the $5,000

Investor: Sure!

Hmmmmmmmmmm

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