fliprent

The property that I refer to as the Old East Baltimore project is finally moving forward.  The city ratified the sale and the settlement is scheduled.  I need to get a few items to the title company such as the Articles Of Organization,  Insurance Information, etc.  I was pleased to find out that the property insurance is only approx. $640/year and the taxes should be somewhere in the same ballpark.  

There was a little confusion due to the fact that this property was filed under the same case number as several other properties that were sold at the foreclosure auction that day.  One of them was purchased by a wholesaler and he in turn flipped it to another investor.  The wholesaler filed for a motion to substitute the purchaser so it was filed on the case number.  When I spoke with the city circuit court they mentioned that this motion was on my property.  Of course I wasn’t aware of anything like this so I had some questions for the substitute trustee.  I figured it was something like this but I just wanted to make sure no funny business was going on.  He looked it up and explained that this was indeed the case.  So far this looks like what we like to call a “vanilla foreclosure”, meaning no disputes, attempts to redeem, or other interruptions.  

I’ve had some folks ask why I broke my rule of not buying foreclosures.  I would like to clear this up some.  I don’t like to buy Pre-foreclosures from home owners.   Pre-foreclosures are bought prior to the actual foreclosure.  Pre-foreclosures require that the owner and the investor negotiate with the lender for what is known as a short sale.  In some cases the owner can actually save his/her home but will unknowingly contract with an investor for a sale.  This particular property was acquired at the actual foreclosure auction which means the Pre-foreclosure period has ended.  It was owned by an investor (not a live in home owner) and was part of a group of foreclosures for the same investor.  A foreclosure on an investor is somewhat akin to owning a business and incurring losses of assets or other capital.  Businesses loose money all the time for many reasons.  In this case this investor (business) lost an asset (actually several) that she failed to manage properly.  Some of her assets were auctioned (foreclosed) to the highest bidder.  She actually recovered some of her losses because the property sold for much more than what she owed the bank.  On top of that she will probably write down these “losses” on her taxes.  At this point you should be thinking ”Not so bad a deal for her after-all…”