Trustee Sales

Trustee Sales (Foreclosures) aren’t just easy money. There are a lot of sharks there and there are the details they don’t tell you about at the pricey seminars. (Really cool insights from my finance teacher):

With any sale, you get full disclosure, the agent, by law has to let you know about any issues. “As is” means that if there’s something wrong, you accept it but you get to know about it first. Trustee’s sales however are an exception. There’s no disclosure required. This means that noone has to tell you anything. That’s quite a difference.

While the prices are nice (just open up any local newspaper’s announcements section) and the transaction is lightening speed (you pay with cash or cashier’s checks) and the risk is high.

Teacher’s story:
You see an ad for a place in a super nice area. It’s selling for just a few hundred thousand. Why “just”? Because the land itself is worth far more. The nearest houses are in the millions.
You drive up and see the place. It’s a palace. Even if all the furniture inside is destroyed, it’s all good, the place is worth far more.
So what’s the catch? Few hundred thousand for a million dollar dream home?
Indeed, a multi-million dollar dream home with some additional baggage. If you didn’t do your research and jumped into it, you would buy that property along with it’s other liens (money owed). The few hundred thousand was the third lien, and with it you’d be buying the other junior and the first one (well worth the property in debt). Unless you asked, noone would have to tell you anything. There’s no disclosure required.

I’m really excited about the class. It’s so nice to have it in person. There’s just something special about having a good teacher enthusiasm that no textbook or online course can provide.