What is a trustee sale?

April 10, 2010 - PRLog -- Many investors have probably heard the incredible stories of others making astronomical returns buying trustee sales or "buying on teh court steps" but most are not familiar with the process or how or where to get in on the action.

Well, what is a trustee sale? In simple terms, a trustee sale is the final step in the foreclosure process. Once a bank or beneficiary has decided to foreclose on a borrower in default, that bank must then take necessary required by most state laws before it can sieze that asset. For instance, in Nevada the process requres a Notice of Default to be recorded and provided to the borrower. The borrower will then have ninety days to cure the default. If the borrower has not cured within that time, the bank may the file a Notice of Trustee Sale and put the property up for public auction in 30 days. At the auction, the bank will then either take back the asset or it will be sold to a third party investor.

The banks will often start the bidding at a value that is far below current market value. With accurate comparable sales and property specific data, investors are often able to pick up quality assets at 10-40% below market value and well below current replacement cost. There is one catch however. Buying on the steps is a cash business and all purchases have to paid for in cash immediately after winning the bidding.

Sound daunting? It certainly can be. So you ask, how can I cash in on properies at the Trustee auction? I've got cash, I'm tired of relying on a stock market that is unreliable and real estate looks attractive again. Simply put, unless a typical investor can cover up to a thousand miles a day to look at properties, have full access to detailed comparable sales reports at the drop of a hat and employ title contacts to ensure that a property may be free and clear of heavy liens and other title pitfalls, you'd have to work with one of a few  firms that represent buyers at the Auction. One such firm, Fortis Commercial Advisors employs a team of drivers, research staff and title contacts to look at several hundred properties every day of the work week and has been succesfully bidding on behalf of investors. In fact, according to company founder and Managing Partner, Dean Jalili every purchase has been profitable to date. That's some high marks for a business where investors often try to go it alone and end up losing their life savings. "We go to extensive lengths to obtain full title information, visit each and every property we intend to bid on and ensure we know EXACTLY what we are bidding on" says Jalili. One missed lien can bring down a several hundred thousand dollar investment. In a worst case scenario, bidders have previously bid on a sale not knowing that it is a worthless 2nd trust deed and seen every penny they thought was invested go down the drain.

So if you want teh high rewards, there is some risk involved but working with a reputable experienced firm can alleviate most of this risk.

For additional information about investing in Trustee Sales, please visit http://www.fortisadvisors.net/Trustee-Acquisition-Service...