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Finding and Making Deals Before, at, and After the

Foreclosure Auction

About the Speaker

» Aaron Lebovic is a third generation real estate investor. He graduated from the University of Denver in March of 2002 with a BS in Business Administration and a Major in Finance and Marketing.

» Negotiated, managed, and coordinated over 130 real estate transactions in 4 states,

totaling over $23 Million in value.

» Aaron is a licensed Colorado Real Estate Broker, holding his license at Your Castle Real Estate, and was a Director at the Denver Metro Association of Realtors ‘10-’12.

» Aaron is co-owner of www.RENAV.com, a source for short sale, foreclosure, and REO leads – mostly unlisted on the MLS!

About the Speaker (continued)

» Buy & Sell as-is » Buy, Fix, & Sell » Buy & hold » Hard money lender » Multiple forms of partnership

Money partner, working partner, half/half

Aaron Lebovic is not an Attorney, Mortgage Broker, or CPA. He is a broker and investors, and this is all from an investor’s perspective. No legal or financial advice is given or implied. Consult with your Attorney and CPA!

This class only discusses the Colorado process and Public

Trustee Foreclosures and NED’s filed AFTER 12/31/07

Talking Points

1. Definitions 2. Timeline 3. Resources 4. Preparing to bid 5. Bidding at the auction 6. Ways to protect yourself 7. Statistics 8. Q&A

Definitions Notice of Election and Demand (NED): Written notice that a lender is electing to foreclose on its deed of trust and a demand that the public trustee sell the subject property at public sale. The lender starts the foreclosure process by filing this document with the public trustee who then records it with the county clerk and recorder. Bank Bid: Opening bid amount determined by the Lender as a minimum amount it would accept at sale Certificate of Purchase: Recorded with the county clerk and recorder within 5 business days after the sale in the name of the winning bidder. It states the time and date of the sale, the name of the purchaser, and the purchase price. This is not a deed. It can be assigned.

Definitions

Lien Position: First in time (recorded), first in line. Example: 1st = January ‘09 - $200,000 deed of trust 2nd = April ‘09 - $10,000 deed of trust 3rd = May ‘10 - $20,000 judgment lien Redemption: A junior lien holder can protect its interest in the property by paying off the auction buyer and then owning the property (or paying any senior junior liens who redeemed). Note – for junior lien holder redemption rights, most liens must be valid & recorded prior to the NED (there are some exceptions).

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Talking Points

1. Definitions 2. Timeline 3. Resources 4. Preparing to bid 5. Bidding at the auction 6. Ways to protect yourself 7. Statistics 8. Q&A

Foreclosure Timeline for NED’s Filed AFTER

12/31/2007

Pre-NED Lienor

Redemption

Period

1st Junior

Lien

2nd Junior

Lien

3rd Juninor

Lien

Public

Trustee

Sale NED

Pre Foreclosure Default

Public Trustee

records NED

Notice of Intent to Cure

Must be filed at least

15 days before Sale

Cure by noon

day before sale

Certificate of

Purchase issued w/in

5 days of sale

Lienor Intent to Redeem

Must be filed within 8

business days after sale

Non-Agricultural Cure Period

110-125 days

Lender can expedite if

abandoned

15-19 business days

5 business days

5 business days

RENAV Visit renav.com/timeline for a FREE copy!

Talking Points

1. Definitions 2. Timeline 3. Resources 4. Preparing to bid 5. Bidding at the auction 6. Ways to protect yourself 7. Statistics 8. Q&A

How do I find out what is in foreclosure, and what is going to auction?

» New NED filings: » County Public Trustee Website » Data providers like Renav.com and Realtytrac

» Foreclosure auction BIDS:

» County Public Trustee Website » Renav.com

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Talking Points

1. Definitions 2. Timeline 3. Resources 4. Preparing to bid 5. Bidding at the auction 6. Ways to protect yourself 7. Statistics 8. Q&A

Preparing to Bid

» Foreclosure Auctions are held weekly

» Lender submits bid by noon two business days before auction

» Public Trustee posts bids online around 3pm, or service providers will package information in an easy format within 45 minutes.

Let the research and due diligence begin!

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Talking Points

1. Definitions 2. Timeline 3. Resources 4. Preparing to bid 5. Bidding at the auction 6. Ways to protect yourself 7. Statistics 8. Q&A

Bidding at the Foreclosure Auction

» Opening bid amount can be what is owed or less.

» Lender can retract a bid anytime before the auction.

» Bring cashiers check or wire the funds before (or in some counties, after) auction

» Submit to Public Trustee a Registration to Bid

» Bankruptcy, if appropriately filed, can stop the sale.

Bidding at the Foreclosure Auction (Continued)

» Trustee identifies the property

» The first bidder called opens the bidding at $1 or $50 over the lenders bid

» All registered bidders go around the room one by one bidding each other up, until one at a time they drop out.

Bidding at the Foreclosure Auction (Continued)

» Winning Bidder hands over cashiers check immediately, or within a certain time after the auction.

» A certificate of purchase is recorded in the winning bidders name within 5 business days.

Bidding at the Foreclosure Auction (Continued)

» Proceeds from sale are used to pay the foreclosing lender, junior liens and

the homeowner.

» If a junior lien forecloses, the winning bidder gets title subject to the senior

lien holder’s interests. Example:

1st Lien: $100,000 2nd Lien: $50,000 3rd Lien: $10,000

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Real Estate Brokers

» Brokers can make a commission by representing auction buyers:

» Brokers can enter into an agreement (to CYA) and invoice buyers for compensation, just like a doctor or attorney would.

**Consult with your attorney and managing broker**

Talking Points

1. Definitions 2. Timeline 3. Resources 4. Preparing to bid 5. Bidding at the auction 6. Ways to protect yourself 7. Statistics 8. Q&A

Protect Yourself » You pay all Statutory & Super-liens. Check those amounts.

» Get an O&E and a Title Commitment » You are bidding on the LEGAL DESCRIPTION IN THE DEED OF TRUST

BEING FORECLOSED, not the commonly known address! » Pay for your Title Insurance and Property Insurance IMMEDIATELY

after purchase at the auction

Protect Yourself

Built 1856 3,106sf Single Family Home Tax value $399,800 Opening Bid: $285,000

Talking Points

1. Definitions 2. Timeline 3. Resources 4. Preparing to bid 5. Bidding at the auction 6. Ways to protect yourself 7. Statistics 8. Q&A

Statistics » 2013 auctions in the 20 counties we track:

» 16,247 properties were scheduled » 7,423 properties actually went to sale » 2,372 (32%) were sold to investors » The average investor’s winning bid amount was $171,676

» YEAR TO DATE:

» 3,504 properties have sold at auction » 1,253 (36%) of properties were bought by investors. The average

winning bid is $174,507 » Adams = 51% of homes sold are bought by investors » Arapahoe = 54% » Douglas = 57%

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Active Foreclosures vs. MLS Listings (Detached Single Family Homes)

8/8/14

County Active on MLS Active in Foreclosure

UNLISTED homes in Foreclosure

Adams 777 499 449

Arapahoe 1187 452 403

Denver 1057 546 504

Jefferson 1387 354 321

El Paso 3767 736 630

Pricing Matrix How do I get in on these deals?!? Your Source of SHORT SALE, FORECLOSURE, and REO deals!

Visit Renav.com/Promo

Code: CAR25

Expires: 8/22/14

25% off ANY subscription – ongoing monthly Discount applied monthly until you cancel (cancel anytime!)

Daily unlimited leads and property tracker alerts

Prospecting, market reports, and communications tools

Auction properties that recently sold that YOU SHOULD BE MAKING OFFERS ON!

Cancel anytime!

In our full day class we go much more into detail on:

Specific times to find deals before, at, and after the auction!

Step-by-step property qualification process

Specific ways to minimize risk including websites and phone numbers

Ways to legally get inside of properties before auction

Junior Lien holder Redemption's - what, where, who, and how

Borrow money and make your lender protected the entire time, including lenders working with Auction buyers.

Class accredited by Oliver Frascona’s Real Estate School

Brokers receive 7ce Credits!

Cost:

$300 for one person

$200 per person for a group of 2+ that sign up together

Upcoming Classes Thursday, October 9th, 9:30am – 5pm in Denver

A-Z Foreclosure Auction Class Join us for a personally guided tour of Renav.com

» Timing is everything – when do you want to get these deals? » Comping tools » Market Reports » Property Tracker » Search Tools » My Values/ Notes » Statistics

Cost: FREE!

Online LIVE DEMOS and other classes: www.renav.com/education

Upcoming Demonstration

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Thank You for Attending!

STAY TUNED Question & Answer Session and

Renav.com demonstration