A smart investor just picked up a nice little duplex on San Luis Ave in South Gate on January 27, 2017. This property is part of the Next Wave foreclosure properties I have been talking about in my webinars. The loans are just over two years old. The old owner was a Real Estate Firm. I had been watching this one, because it is not common to see a Real Estate office drop the ball this way.
They bought the property for $360,000.00 but somehow borrowed $378,125.00 at closing. They then fell behind on payments and lost the property altogether. This is a classic example of what not to do as the owner of an income property. There may be more to this story, but what matters is the final chapter.
This property went to sale on the first loan, which is obviously a purchase first td, so safe to bid on. The lender was owed $343,817.80 on a property valued at $496,300.00 so there was no reason to discount the opening bid. They asked for every penny and they got it. The final price was $365,500.00 so there was a little left over to pay towards the second loan, that was likely written by the same lender. The lender lost some money here, but the new buyer got a deal.
I did check Zillow by clicking on the link on our profile. It turns out the old owner had been trying to sell the property for $499,800.00 right up until the Trustee's Sale took place. As I have said many times, there is always more to the story. Research reveals details and details make all the difference.
Someone knew to do their homework on this property. By waiting for the auction they got it for over $130,000.00 below the asking price. That is cash that can be used elsewhere and now the new owner has a Money Machine!