Buying a Foreclosure in Alberta

UTCVenturesLtd

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Registered
Has anyone gone this route (especially since July, 2007 as the market turned flat) and if so, how did it turn out? Is there really enough spread between what you buy them at and what you can sell them for to make enough money to make it worthwhile? Do the banks try to get closer to current market price instead of just trying to retrieve what is owed to them? How do you go about finding them? What are the pluses and the minuses of going this route with investing in real estate?
Dean
ve6eee@yahoo.com
 

DennisEpp

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In my expierence today or yesteryear, not worth while. It has nothing to do with the banks trying to recover their loss in the respect to pricing. Actually with maybe the odd exception the lenders do not recover their loss at all. They run a deficit on this. I have had the N.A.H.A. Housing (northern alberta housing association) selling contract (with partners) when they stopped this program and sold off their properties. Also with a group of 18 we bid on the C.M.H.C. contract and got it. That contract gave us the whole half of Edmonton and some outlaying area. It ran us a deficit and so did not consider renewing the contract. Reason? The property is generally priced above what we felt was market and offers are not considered if below their perceived value. If the property stayed on the market too long, they may have a meeting and discuss and may reduce... On a C.M.H.C. insured loan, the insurance is for the lender. The lender is unable to sell the property on mls...insurance kicks in for them. FORECLOSURE IS NO DEAL. The properrty you may want to look for (write a very clean offerr to purchase) is a Judicial sale. These are or can be very good, but rare in the past few years because of the good Albeta economy.

Dennis
 

amiepardy

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REIN Member
I personally know a few people who do very well buying foreclosures in Alberta. Again it depends on your knowledge of how to buy and analyze the property you are buying. It has to go through a similar filter as any other home that you are considering buying. I personally know people for whom this is their main focus and do very well at it. Although I have not bought a foreclosure I would not hesitate to do so, it all depends on where you want to focus your energy. You can buy well under market value. I suggest checking out a website that I found interesting. www.foreclosurescanada.com Best wishes Amie Pardy
 

Bill

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Registered
QUOTE (amiepardy @ Jan 30 2008, 10:09 AM) I personally know a few people who do very well buying foreclosures in Alberta. Again it depends on your knowledge of how to buy and analyze the property you are buying. It has to go through a similar filter as any other home that you are considering buying. I personally know people for whom this is their main focus and do very well at it. Although I have not bought a foreclosure I would not hesitate to do so, it all depends on where you want to focus your energy. You can buy well under market value. I suggest checking out a website that I found interesting. www.foreclosurescanada.com Best wishes Amie Pardy


We have purchased foreclosures both off of the MLS (minor success due to the increase in rents and values) and prior to them making it all the way to a judicial sale and directly from the seller. The MLS properties very rarely work as they are at full price and you are buying as is, sometimes you cannot even get in to see them, so there is some bigger risk attached.

The properties that have not made it to judicial sale yet are a much better opportunity. You can save some people from getting a foreclosure on their name and create a win win circumstance where you get a property under value (and usually in dire need of renovations), or with very good terms. Quite often the seller needs money NOW and their mortgage caught up, this can create some great purchase options.

The down side is you have very little choice as to where the properties are so you have to be able to determine if it works for a rental or flip property fairly quickly and then be able to deal with either option. Most REIN members are buy and hold people, so the flip idea sounds attractive, but requires a lot of homework. Especially in the current market which isn`t so flip friendly.

By the time most people have access to the forclosures though they are already listed on the MLS, so it is to late.
 

TIMWEMBLEY

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Hi
I`ll share my Story Sorry it`s a little long
In my area (Grande Prairie) I have only seen 2 Judicial Sales advertised in the last few years. One of them I bought, but alot of things had to fall into place to make it a deal. The one I bought was advertised in the paper as a judicial sale of propoerty. I went to veiw it and a friend of the gentleman who was losing it and had helped him move out kept the key and left her number on the door with a note saying anyone wishing to veiw the home to call her. She was hoping to get top dollar so her friend would be short less to the bank.(I don`t think you could have veiwed it with the banks permission) I veiwed the home and it needed some cosmetic work but nothing major. I put in a bid that had to be unconditional with 10% down. I figured it was worth $130k-$140k as is. I bid $102k . A couple weeks later I got a letter saying all bids had been rejected and listed everyone who had bid on it and how much there were 5 or 6 bids mostly in the 90`s with one in the 70`s. Mine was the highest bid but they were rejecting all of them but invited us to attend the court date. I decided it would be a learning experience and went. No other bidders showed just the friend who had let me veiw the house, the gentlemans lawyer, a court rep , a judge and the banks lawyer via conference call. The bank just confirmed they were rejecting all bids and saying they were going to sell via Real Estate agent. The judge asked what the bank was owed it was about 224K and what the value of the property was. The lawyer who was very unprepared studered and stammered on value of home and said they had a apprasal of $117k from about 6 months previous but beleived the market had went up "lots" since then. The judge said if the ONLY apprasial you have on the property says $117k then if anyone were wanting to pay that for it the bank would have no choice but to accept a full value offer. The lawyer for the bank wasn`t impressed by this but was so unprepared that she had no arguments. The judge gave me a week to decide if I wished and I took him up on the offer. I had to scramble to get some short term financing(just wanted to flip it as is) and get the home inspected. Normally home inspection would have been tough to do but I had made friends with the lady who had let me in to begin with. I found a hard money lender who was going to loan me all the cash for a month. Got the home inspected all was good except in the attic the inspector found what may have been asbestos insulation which for me would be a deal breaker. I took the a sample overnight couriered it to a lab in calgary for inspection. The day I had to decide wether to buy I got my results back and it was not asbestos. I agred I would take the property and set close for 3 weeks. I started advertising the property for sale immeadiately for $135k firm. I had a family come to look at it but we couldn`t get in as the bank had the locks changed. I described the property(didn`t even have pictures very unproffessional) and since very little was on the market they said they would pay $135k conditionally to veiwing inside of property and financing and left me with a deposit. Since I wanted to do a back to back close I needed to get in the property and the bank wasn`t cooperating. I mentioned to one of the people who was working for me at the time what I was doing and by some fluke his inlaws actually took care of repossed houses for banks. I asked what his father inlaws favorite whiskey was and got his phone #. He was happy to meet me and my buyers out there. The buyers loved the house and were really happy with the whole situation. I made a nice profit without owning the house a whole day my hard money lender got paid $1500 for tying up his HELOC for less than a week. I also got the friend who showed me the house a gift certificate to a nice restuarnt as a thank you. It was a lot of work and scrampling around but I learned alot and would do it again if the opopurtunity arose. I beleive a big part of what made it work was an unprepared banks lawyer and a Judge who saw things in a way that favored me.
Thats my story happy hunting
Tim Blake
 

LAndersen

Inspired Forum Member
Registered
How do you go about finding out about opportunities like this? Sounds interesting. Anyone purchased a multi this way before?
 

WadeFenner

Inspired Forum Member
Hello,



As the founder & owner of ForeclosuresCanada.com I have bought a lot of properties out of foreclosure.....



Important Note: This was done while dealing directly with the owner not through a realtor or properties that were listed for sale on the MLS as a judicial sale or otherwise.



For years I published a subscription based information service that detailed all the financial information on every "Statement of Claim" registered in the Calgary & Edmonton court house. One of the reasons we quit doing this in 2009 was because there wasn't any equity in most of the files we pulled (at great expense I might add).



There have been a few copycat companies start up in the last few years that try to sell Foreclosure Lists be aware of the fact that:

[list type=decimal]
[*] Most people who go into foreclosure do so on mortgages that are only a few years old
[*] Which means they financed the house 2-3 years ago at the peak of the market
[*]Which means its worth far less today than at the time they financed or bought the property
Which means there probably isn't any equity in it
Which means NO PROFIT for you.
[/list type=decimal]

I kept a very close eye on foreclosures up until a few months ago so I know the case is the same now as then if not worse.



BE AWARE of people trying to sell a list. I'm not saying there isn't any chance of finding a property with equity but I am saying the pickings are slim.



Going with a real estate agent is also tough because the lawyer acting for the bank is trying to recover as much as possible for their client "The Bank".



Yes you can get a good deal now and then but again the pickings are slim and you have to really know how to present your offer (Or your realtor does) in order for it to get accepted. And you need to approach the whole idea in a very logical manner. This is not the US where they will just blow properties out at fifty cents on the dollar.



Yes some people are making it work but don't expect to buy a pretty house, that needs no work, way under market value. Yes it might happen and might have happen for somebody somewhere but the pickings are slim and its a big numbers game....





SCAMMER WARNING:



Aiden Win (His online name) is a scam artist (Aid and Win) ha ha - but he does have a sense of humor. Goes under different names Mr. Foreclosure is another name of his.



How do I know this? Because I have contacted the RCMP about him and my own experiences with him.



Any other specific questions? Fire away......
 

WadeFenner

Inspired Forum Member
PS.....



PLEASE NOTE:



ForeclosuresCanada.com



(My old site) is no longer operating and no I do not know of any list companies to reccomend nor do I have anything to do with foreclosures anymore so please don't ask.



I may take a run at a MLS listed foreclosure for a client now and then but I'm not the foreclosure guy anymore.......
 
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