Its probably happened to you... Folks learn that you know something about real estate investing and they eagerly ask you about buying foreclosure property.
The general assumption is that they can buy a beatiful home at a deep discount at a foreclosure auction.
Their smiles fade when you explain that they will have to pay cash on the spot and they must be able to research title to be sure they arent buying trouble. But wait... theres more...
There is also a little something called the "Durrett Rule".
Oh boy... can that be a like a knife in the back.
For example:
You spend the time and effort scouting out a nice home scheduled for foreclosure auction. You search title and scare up the cash to have in your pocket when you go to the sale.
Hurray... You have the winning bid at the foreclosure sale and buy the home at about a 40% discount to market value.
After doing your happy dance you spend the next few weeks doing needed fixup. Then you find a renter and settle back to collect rents for the next few years.
But wait! Whos that knocking on the door. Why its a nice man who says he is taking the home away from you.
Who is this pretenious devil? He is the dreaded...
BANKRUPTCY TRUSTEE!
Shortly after the original homeowner lost his house he filed for bankruptcy. The wheels of the bankruptcy court grind slowly and the trustee just recently learned that the house had been sold at the auction.
And... The owner of that house had a nice hunk of equity in the home when he lost it. Uh oh.. get ready for this.
It is trustees job to capture that equity so it can be distributed among the bankrupt home owners creditors. Can he do that?
Yes! Under the power granted by The Durrett Rule the trustee can show you the door and claim the home in the name of the bankruptcy court.
You see the bankruptcy court has more power than Edison Electic. It can do about anything it wants when it comes to assets and creditors.
Oh sure, months later, after a battle in the bankruptcy court, you should be able to recover the money you paid for the home.
Of course... no interest is paid on the money for the time it is tied up in court and you will not be able to recover the attorney fees needed to get your money back.
Buying at the foreclosure sale is not for sissies!
Stick to an easy money tactic... buy in the preforeclosure period with this system....
http://CashFlowInstitute.com/foreclose.htm
CFI suggests that every investor understand how to do title searches. That skill can not only save you much grief... but can allow you to do profitable deals others cant.... We suggest you learn just as the pros do...
http://digbig.com/4cefb
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JUST CHECKING!
Have you checked our Real Estate Investor Base Camp Page lately? We have some exciting new additions...
http://CashFlowInstitute.com ...................
WEB DETECTIVE
Recently we mentioned a certain Web site as a great resource for doing background checks. It was a huge hit.
If you missed it please take a look right now...
http://digbig.com/4bydm
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Thanks for your help!
Until next time - Go Forth and Prosper!
Mark Walters~
P.S. Have you visited our "Investor Base Camp" lately? Go there now: http://CashFlowInstitute.com
Want to get more exposure for your business Online? Want to start your own Online Business? We show you how with our "Internet Business Opportunity Review"...
http://BusinessOpportunityReview.com
About The Author...
Mark Walters is a third generation investor, author, speaker and publisher. He is the Webmaster of
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