What We See When Working ForeclosuresPosted on September 17, 2012 by
We bought two properties at the August foreclosure auction in Bartow County. After the auction, a new real estate investor asked us a question we hear often: What do you see when you’re out working foreclosures? Today’s column answers this question.
A couple of days ago, I headed out to look at some properties scheduled to be sold at the September foreclosure auction. Joining me were my buddies Houston Long and John Clark. Houston is an experienced investor who has one of the best creative deal-structuring minds around. John is new to real estate investing and is a quick learner.
Our goal was to see 27 properties that day. (There are a total of 115 properties advertised to be sold at September’s foreclosure auction in Bartow County.) To make finding the properties easier, Houston maps them on his iPad, then breaks Bartow into quadrants and sectors. Working with him reminds me of a Tom Clancy novel and having “John Clark” in the car definitely adds to this feeling.
Of the foreclosure properties we saw, a little over a third were abandoned. A good number of these had been empty for six months or longer. Sadly, this ratio is pretty typical.
Abandoned properties come in three basic varieties. First, there are properties where the homeowner literally vacuumed her way out of the house. With the second type, the homeowner leaves some or all of her personal possessions behind. This ranges from some trash on the floor to a house full of furniture. The third type is the kind that you don’t want to enter without wearing a biohazard suit. Filthy, disgusting and gross doesn’t come close to describing these kinds of properties. These homes often include roaches, rats and/or fleas. My skin crawls just thinking about it!
When the home is occupied, what I say to the owner after knocking on the door depends on whether there is a For Sale sign in the yard or not. If there is a For Sale sign, I ignore the fact that he’s in foreclosure and simply say, “My name is Bill. I see your house is for sale. I’m looking for a house in this area. Would you mind telling me about yours?” This is exactly what I say to anyone advertising their home for sale.
It’s more difficult if there isn’t a sign in the yard. More often than not, if there isn’t a For Sale sign, I simply explain that their house was advertised for sale in the local paper, and that I’m looking to buy a home in the area.
Nearly all of the folks in foreclosure I talk to are very nice. Most of the time – if they’re not trying to sell their house – I simply get the foreclosure wave. This is when – after asking if their house is for sale – the homeowner waves her hand at me and says, “It’s not for sale. We’ve got the problem worked out.” Not much I can say or do when this happens, except to drive to the next foreclosure property and knock on another door.
Hope this helps you to see what we see when we’re out working foreclosures.