I have never gone the route of buying a foreclosure home (going to auction) on a house my wife and I want as primary residence. I'm being told I need to have all cash on hand to make this a reality. The reality is I don't have that kind of cash on hand. What are my options?

Thanks in advance!

Private lender plus refinance?

Ragoo said:

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Private lender plus refinance?

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What I was thinking too. Banks won't give you the money for it.

I could not imagine the interest on this given the amount of risk the private lender is taking on.

I would take a personal line of credit and if not, just save up the money.

Medaggie said:

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I could not imagine the interest on this given the amount of risk the private lender is taking on.

I would take a personal line of credit and if not, just save up the money.

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But who would give a personal line of credit for likely a few 100 thousand?

That is the issue I assume from banks...they don't want to take risk, especially with an occupied property. I will end up competing with bidders that flip properties for a living at the auction while my intent is to live in the house.

How much work does the house need? If none then you should be able to get an appraisal and refinance pretty quick post sale. The tricky part comes in where the house needs significant work. You are stuck on a private money loan while work is being done and hopefully it appraises where you need to complete a refinance.

The seller has requested not to attempt contacting the occupants so I don't think an appraisal is optional for this property. Based on drive by's from the outside, the house looks to be in good shape, just needs a bit of a facelift on landscape. I'd say the external looks to be a good chunk of what the seller is asking for but I'm not a professional to judge this.

boyz05 said:

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The seller has requested not to attempt contacting the occupants so I don't think an appraisal is optional for this property. Based on drive by's from the outside, the house looks to be in good shape, just needs a bit of a facelift on landscape. I'd say the external looks to be a good chunk of what the seller is asking for but I'm not a professional to judge this.

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So this is a single family home that's in foreclosure with tenants in it?

That's correct

Yeah, that is the downside. Just my thinking but these tenants may have found some loopholes to stay in the house but the seller is taking big strides to sell the house to remove their ownership (liability)

I use a line of credit for auctions or quick closes and re-fi later. Easy and cheap


I wouldn't buy an occupied home unless you have talked to the occupants, epecially for your first one. If you piss them off, they can cause $30k worth the damage real quick.

boyz05 said:

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The seller has requested not to attempt contacting the occupants so I don't think an appraisal is optional for this property. Based on drive by's from the outside, the house looks to be in good shape, just needs a bit of a facelift on landscape. I'd say the external looks to be a good chunk of what the seller is asking for but I'm not a professional to judge this.

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i meant after you purchase.

I'm not familiar how it will play out but I imagine that I will not be able to do the appraisal until the tenants are out of the house if that is what you are asking.

It is a risk and will ultimately end up being a delicate situation with the current tenants. I have no intel to how this can pan out but I do know the property was on auction before but was removed due to highest bid being insufficient and became an REO property. Fast forward a year later and the lender has now put the house back on auction

boyz05 said:

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I'm not familiar how it will play out but I imagine that I will not be able to do the appraisal until the tenants are out of the house if that is what you are asking.

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What makes you think it is tenants in the home and not the owners?

I guess I'm not following. If it wasn't sold at the courthouse and is REO, the bank should have gotten the people out already. *assuming you are in Texas and not some lefty state with terrible laws.

Not saying the tenants were never the owners before. The bank took over this property.

Cash or hard money. And hard money does not like this deal. You buying as primary residence and squatters in the house. Are you smoken? So cash is the only remaining option.

If you are getting a 50% value deal that would be the least ROI I would consider.

^ What he said. The occupancy status really throws a kink in this for a lender. That being said, we're a private/hard money lender and will at least take a gander at it if you'd like to send some details.

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