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Investing In Real Estate With Lex LevinradAuthor: Lex Levinrad
Do you want to learn how to buy rental properties, wholesale real estate and flip houses? Join Lex Levinrad on the Investing in Real Estate Podcast and learn how YOU can get started investing in real estate today. This podcast is full of ACTION PACKED information and CONCRETE ACTION STEPS that you can start taking TODAY to learn how to start investing in real estate, buying rental properties, fixing and flipping and wholesaling houses. Join Lex as he talks about EVERY TOPIC related to INVESTING IN REAL ESTATE including wholesaling, locating deals, finding properties, flipping properties, hard money lenders, online auction sites, marketing for motivated sellers, building your cash buyer lists, deal structuring, fixing and flipping, buying and holding real estate long term, buying rental properties, buy repair rent and refinance, and investing in Airbnb. Lex has trained thousands of students from all over the world how to invest in real estate. Lex has personally flipped over 1,000 houses and he can teach you the one thing that everyone is looking for - FINANCIAL FREEDOM. Listen to Lex interview some of his successful students who have quit their jobs and now flip houses for a living. If you want to get MOTIVATED and INSPIRED by people who are actually flipping houses RIGHT NOW, then LISTEN TO THIS PODCAST. Lex will also introduce you to some of his real estate friends and he will interview some of the biggest wholesalers and flippers in the country. You will learn from the experience of real estate investors who are doing deals every single day, investors who are literally doing thousands of deals. Listen to this podcast so YOU can learn how to achieve massive results investing in real estate. If you want to learn how to invest in real estate and how to find, fix and flip houses for a living (and maybe even quit your job) then SUBSCRIBE TO THIS PODCAST. Language: en-us Contact email: Get it Feed URL: Get it iTunes ID: Get it |
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Bidding on Online Auction Sites
Tuesday, 11 February, 2025
On today’s podcast episode, I talk about bidding on online auction sites, and buying bank owned properties and foreclosures. In order to understand buying foreclosures and bidding on bank owned properties on online auction sites, it’s important that you understand the foreclosure process and how it works. I will be covering this in detail at the Foreclosures and Bank Owned Properties Boot Camp next weekend. You can learn more about the Foreclosures and Bank Owned Properties Boot Camp at the link below: https://www.lexlevinrad.com/foreclosures-bank-owned-properties-boot-camp/ There are 4 stages to foreclosure: Pre-Foreclosure Foreclosure Foreclosure Auction Bank Owned Property Pre-Foreclosure In the pre-foreclosure stage, the homeowner is late on their mortgage payments. They can be 30 days, 60 days, 90 days or 120 days late. According to the Dodd Frank Act, banks cannot pursue a foreclosure lawsuit until a homeowner is 120 days late so any homeowner who is late up to 120 days (or until the bank initiates a foreclosure lawsuit) is considered in pre-foreclosure. You can market to these homeowners by accessing 30 60 90 day late mortgage lists from data providers and marketing to these homeowners before they go into foreclosure. Foreclosure After the bank has initiated a foreclosure lawsuit (known as “Lis Pendens” in Judicial States like Florida), the homeowner is now in foreclosure. Foreclosure is public record and you can get access to this data by using data providers like Propstream (you can get a free 7 day trial at https://www.lexlevinrad.com/propstream/) Many real estate investors download the foreclosure list and market to homeowners in foreclosure by mailing postcards and letters. Investors can purchase these properties before the foreclosure auction directly from the homeowner. On new foreclosure filings, a foreclosure auction date has not yet been scheduled, but after a few months, a foreclosure auction date may have already been set. It’s very important to understand this and to know if there is a foreclosure auction date and what that date is. Any investor can buy the property for cash directly from the homeowner up to theoretically the day of the foreclosure auction. In reality if you were using a title company and you were going to do a lien search, you would want to close at least a few days before the foreclosure auction which means you would need to sign a contract with the homeowner no later than 3 weeks before the foreclosure auction date. Foreclosure Auction Investors can register to bid on the property at the foreclosure auction which is held online by the County Clerk in most counties. I do not recommend buying at the foreclosure auction since you are not guaranteed to receive free and clear title and the property may have liens and building violations attached to it. At the foreclosure auction, the property is sold to the highest bidder. The bank will have a representative who is usually an attorney who will bid up to or very close to the amount of the original mortgage that was owed by the homeowner. This is done to protect the bank's interest for the amount of the money owed. In the event that the bank is the highest bidder (because other investors don’t want to bid that high), then the property will go back to the bank. At this point the mortgage is wiped out and the bank now owns the property and it becomes a bank owned property. Bank Owned Property (REO) Once the property goes back to the bank it becomes a bank owned property or REO (which stands for real estate owned by the bank). The goal of the bank is to get rid of this property as fast as possible. They do this by only selling to cash investors. They do not allow mortgages because the bank wants a quick sale and does not want to wait to see if the house will appraise or if the buyer can get approved. The bank only accepts cash offers and requires all offers to have a proof of funds letter showing that the buyer has the funds available to purchase the property. We provide a proof of funds letter to all students that are in our real estate training program. The ideal buyer for a bank is an investor that will pay cash and waive all contingencies including inspections. Why is this ideal for the bank? Because the buyer cannot back out. There are no appraisals, surveys, inspections or requirements to be approved for a mortgage, so for the bank this type of offer is the one that is most likely to close and sell fast for cash (which is what the bank wants). Once the bank owns the property, they assign an asset manager in their loss mitigation department to oversee the sale of the property. This asset manager hires a few local real estate agents and requests a BPO which is a broker's price opinion on what the property should be listed for and what the current value of the property is. The asset manager then chooses one of these agents to be the listing agent and list the property on the MLS. Investors can see these bank owned properties on the MLS and make an offer to purchase the property by contacting the listing agent. Online Auction Sites In some cases, the bank chooses to use an online auction site like www.hubzu.com, www.auction.com or www.xome.com to sell the property. While the property is still listed on the MLS, all buyers are required to bid online using the online auction platform that the bank chooses (instead of contacting the listing agent). This information about what auction platforms is being used is readily available in the comments section of the MLS Listing and can even be visible on www.realtor.com and www.zillow.com Anyone can go to these online auction sites and register to bid. The key thing to understand is that the price on the MLS may be the starting bid price and not the price that the bank is willing to accept. On all online auctions there is a “reserve price” which is the minimum price that the bank is willing to sell the property for. If a property does not sell or does not meet the reserve price then it is listed again until it is sold. In order to bid on online auction sites you will be required to register. Part of the registration process is for them to verify your identity and for them to require you to provide a credit card for the bid deposit. If you bid on a property and you are the winning bidder, the auction site will deduct the amount of the auction deposit from your credit card. This amount will only be refunded to you if you close on the property. If you do not sign the purchase contract or if you choose not to buy the property you will lose the bid deposit. Each site has different bid deposits and the bid deposits change often. Most of the properties listed on online auction sites have a bid deposit of around 3% to 5% of the purchase price. Each online auction specifically states the required bid deposit in the listing. Make sure you pay attention to that before you bid. Proof of Funds Letter You will also be required to upload a proof of funds letter to show the bank that you have the funds available to purchase the property for cash. If you have a bank account statement with the funds readily available use that. If you don’t then you can use a proof of funds letter. We provide all of our students in our training program with a proof of funds letter for them to bid on online auctions and bank owned properties. Government Sponsored Entities (GSE’s) Another set of online auction sites are Government Entity Sites like HUD, Fannie Mae and Freddie Mac. You can see HUD Homes on www.hudhomestore.com. Fannie Mae Homes are listed on www.homepath.com, and Freddie Mac Homes are listed on www.homesteps.com although Freddie Mac currently has a partnership with www.auction.com where the Freddie Mac properties are listed on their platform instead. Learn How To Buy Foreclosures and Bank Owned Properties Foreclosures are skyrocketing. 1 in every 247 homes in Florida had a foreclosure filing in 2024. There are millions of homeowners that are in pre-foreclosure and foreclosure. There will be many opportunities to buy properties at huge discounts from homeowners that are in some stage of the foreclosure process. Foreclosures that are sold at the foreclosure auction will become bank owned properties. Learning how to buy and bid on these bank owned properties on the MLS and on bank owned property websites will be critically important in 2025. If you are looking to buy your first rental or fix and flip or if you are looking to wholesale and flip your first house then you need to learn how to buy bank owned properties. Understanding how to bid on government entity websites like HUD, Fannie Mae and Freddie Mac will open up your options to buy more properties at a discount. Some bank owned properties sell for as low as 50 cents on the dollar (or less). If you want to get started buying foreclosures and bank owned properties, make sure you register to attend the Foreclosures and Bank Owned Properties Boot Camp which is coming up next weekend. There are only a few seats left. If you want to attend, call my office at (561) 948-2127.
