| It's probably happened to you... | | | | the dreaded... BANKRUPTCY TRUSTEE! |
| Folks learn that you know something about real estate | | | | Shortly after the original homeowner lost his house he |
| investing and they eagerly ask you about buying | | | | filed for bankruptcy. The wheels of the bankruptcy |
| foreclosure property. | | | | court grind slowly and the trustee just recently learned |
| The general assumption is that they can buy a | | | | that the house had been sold at the auction. |
| beautiful home at a deep discount at a foreclosure | | | | And... The foreclosed upon owner had a nice hunk of |
| auction. | | | | equity in the home when he lost it. Uh oh.. get ready for |
| Their smiles fade when you explain that they will have | | | | this. It is trustee's job to capture that equity so it can be |
| to pay cash on the spot and they must be able to | | | | distributed among the bankrupt home owner's |
| research title to be sure they aren't buying trouble. | | | | creditors. |
| But wait... there's more... There is also a little something | | | | Can he do that? |
| called the "Durrett Rule". | | | | Yes! Under the power granted by The Durrett Rule |
| Oh boy... can that be a like a knife in the back. For | | | | the trustee can show you the door and claim the |
| example: You spend the time and effort scouting out a | | | | home in the name of the bankruptcy court. |
| nice home scheduled for foreclosure auction. You | | | | You, see the bankruptcy court has more power than |
| search title and scare up the cash to have in your | | | | Edison Electric. It can do about anything it wants when |
| pocket when you go to the sale. | | | | it comes to assets and creditors. |
| Hurray... You have the winning bid at the foreclosure | | | | Oh sure, months later, after a battle in the bankruptcy |
| sale and buy the home at about a 40% discount to | | | | court, you should be able to recover the money you |
| market value. After doing your happy dance you | | | | paid for the home. Of course... no interest is paid on the |
| spend the next few weeks doing needed fix up. Then | | | | money for the time it is tied up in court and you will not |
| you find a renter and settle back to collect rents for | | | | be able to recover the attorney fees needed to get |
| the next few years. | | | | your money back. |
| But wait! Who's that knocking on the door. | | | | Buying at foreclosure sales is not for sissies! Stick to |
| Why it's a nice man who says he is taking the home | | | | an easy money tactic... buy in the preforeclosure |
| away from you. Who is this pretentious devil? He is | | | | period with this system. |