Home Buying in Oakland>Question Details

Faina L., Renter in San Francisco, CA

I am interested in purchasing foreclosure properties...but they are owner occupied and only to be purchased via auction site unseen. How to find info?

Asked by Faina L., San Francisco, CA Fri Nov 9, 2012

Even with these difficulties the prices are great so I am still interested but wondering what the eviction process will be and if there is any way to find out information regarding the tenants or the state of the homes?

Help the community by answering this question:


Hi Faina:

As someone who has bought a number of properties "at the courthouse steps", I would highly recommend you work with someone who really knows the ropes.

The issues you bring up here are good ones... AND there is a lot more to consider if you really want to play. The fact that you say "prices are great" already raises a red flag. You think you see a $200k property for $12,000? Probably an HOA lien foreclosing.... with 2 loans IN FRONT of it that exceed the value of the property and you are responsible for?

Or maybe it's a 2nd mortgage that you are bidding on? Ooops... what about that $500k 1st mtg that is also foreclosing in another 2 months... on that $300k property.

You also mention "auction site". Sounds like you're referring to auction.com's new "trustee sale" service? There's a lot of issues with, shall we say, price accuracy & actual availability of purported auction properties.

Personally, prices aren't that great for the most part for at least a year now. You have big investment funds basically paying retail in cash and they don't care about tenants or the need to "recycle" their funds by flipping.

Their model is to sink the cash, collect rent, hold for 5 years or so, and then flip into a magically "stronger" RE mkt at that time. Probably will work out OK. Personally I think these "spreadsheet jockeys" are underestimating what a pain in the ass/cost managing single family properties is... but I digress.

If you have at least $500k cash to allocate for this effort, I would be happy to partner with you on Trustee Sale opportunities.
0 votes Thank Flag Link Fri Nov 30, 2012
I am an experienced RE guy and we are in this business now -- it is a pain in the butt. There are good deals to be had, but there are also lots of dogs. It is very difficult to do all the research necessary to mitigate all the risks. Others have also done the work, so good properties tend to be bid up pretty high to the point where you are getting only a 4-6% return assuming no terrible surprises. You can use an attorney to get rid of previous owners or pay them out. It is not ideal, but there is some money to be made. Dont jump into it lightly. I suggest partnering with someone who is more familiar with this type of investing.
0 votes Thank Flag Link Mon Nov 26, 2012
Hi Faina,

Bank owned properties can be found on sites: http://www.hudhomestore.com and http://www.homepath.com. These website list properties that have been foreclosed on are now ready to be put on the market at market value. Let me know if this helps you and if I could assist you with this process.

Yasmine Peters
0 votes Thank Flag Link Tue Nov 20, 2012
Most of the properties purchased on the court house steps are purchased by investors. The only way to really find out the condition of the property is to knock on the door. If the property was attempted to be sold before it goes to the courthouse steps, then you can contact the listing agent and get some recent information from them. You can find out who is the owner by the public records and try to contact that person. Neither the tenant nor the owner being foreclosed on really wants to show you the property or give you information.
Depending on the city, you can find out the eviction process by checking the city rent board website. In order to get someone out in San Francisco- you or a family member would need to move into the property for a few years and would not be able to rent it to anyone else during that time.
There are bank owned properties called REOs that are similar to a normal sales- listed by Realtors and open to the public to view.
Everyone wants a foreclosure. You can see a lot of great deals online and if they look too good to be true they usually are. I would suggest that you meet with your Realtor or go to the courthouse steps and talk to the investors that are at the auctions everyday.
Good Luck!
Simone Hoover
0 votes Thank Flag Link Sat Nov 10, 2012
HI there....I guess my question that no one is noticing is how to find out information regarding the tenants or eviction process as well as the state of the home?
0 votes Thank Flag Link Fri Nov 9, 2012
This is where you will be out of luck. Foreclosure properties sold by the bank, at the courthouse, etc. will not have any information or reports regarding their condition. Ditto for the tenants. Sometimes, if the bank-owned property is officially listed on the MLS, they may mention whether or not the tenant is protected or can be evicted. Some in rent-controlled areas could be problematic. So you'll have to do the research yourself. If you have time, you can go to city hall and get a permit history of the property to see what types of work may have been done with permits. That would give you some idea.
Flag Fri Nov 9, 2012
Unless you really know what you are doing, I would not recommend it. I have attended several of these foreclosure sales, and outside of the all cash problem for many, it comes with everything attached to the property ( liens, clouds, expense, court cases, etc). Pacita already told you it comes with no title insurance. Let me give an example of a property I know of: bought at the steps for 330K but had for over 65K in work to be done that you would not have known. If you cannot buy at max 80% of value at the steps, you cannot make any money ( that is my opinion). Better idea: work with a good agent , and find an REO. It does not come with all that other stuff attached to it, and you can "inspect" the property.
Good luck.
0 votes Thank Flag Link Fri Nov 9, 2012
I agree with the other Realtors who have already responded. First of all, foreclosures are way down. Second, there is stiff competition from cash investor groups, and third, if a property has already been foreclosed upon, the owners are usually gone.

I would love to understand your reasoning behind your stated intention - I suspect you've been misled somewhere along the line!
0 votes Thank Flag Link Fri Nov 9, 2012
You better know what you're doing, and what the challenges are in purchasing properties at auction,

If you're exploring purchasing at the county courthouse, here's a Foreclosure Auction Guide

Also go to Auction.com

Note that in many cases, properties bought at auction may not qualify for title insurance.
You'll see how-to-guides ther

Good luck!
0 votes Thank Flag Link Fri Nov 9, 2012
Strict rent control in Oakland as well as in Berkeley.
Google Oakland Rent Control, and the first stop should be at http://www2.oaklandnet.com/Government/o/hcd/o/RentAdjustment/index.htm
Good luck.
Flag Fri Nov 30, 2012
I'm wondering what the owner eviction laws are in oakland...I have a fair idea of them in san francisco but not in alameda county...
Flag Fri Nov 9, 2012
You are looking at a Pandora's Box:
Foreclosed houses are sold at TRUSTEE SALES, which is also referred to as the Courthouse Steps. Usually, you can preview these houses with the help of a Realtor. They will be sold for CASH only! The will have gone through Foreclosure, so they should have all the LIENS taken care of; but not always, and you won't know until later.
The alternative is AUCTIONS which are handled by a private Auction company: These may let you arrange financing instead of CASH, but you probably won't be able to conduct Inspections, use any Contingencies, or protect yourself. These are the homes that they show on HGTV where the guys buy them, sight-unseen, and then open them up to find all the damage and problems inside.
And then there is the problem on the occupants; if the have a LEASE, then you cannot evict them until the lease is up.

You can do either, but both are real big Caviat Emptor!
0 votes Thank Flag Link Fri Nov 9, 2012
Thanks Rob, this is through auction.com and they are all cash only sales....
Flag Fri Nov 9, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer