Gary and I have been best buds since we were little tykes. And, we’re alike in a lot of ways, too. Even our careers took us on similar paths for a while. After wrapping up our degrees at Purdue, we both dove head-first into corporate jobs that we loved—until we didn’t. In truth, neither one of us were ever cut out for the corporate world. We each possessed too much of an entrepreneurial spirit. But, I was the first to jump ship, head back home to Evansville, and start investing in real estate as a career.
Gary didn’t trail too far behind me, though. And, when he finally decided to take the leap and head home, too, the first thing he asked was where to find the best leads on distressed property. He’d read that buying, renovating, and selling foreclosed homes in Southern Indiana could be a good way to make a great living as an investor. But, he also knew that buying foreclosed houses was not my thing. So, over a couple of craft beers from Carson’s Brewery, I told my old friend where he could potentially find locally foreclosed homes if he wanted to give that direction a try. Then, I explained why I don’t bother and why he might want to think twice about it, too.
Where to Buy Foreclosed Homes in Southern Indiana
The reason a lot of new and would-be investors, like Gary, figure foreclosed homes make some of the best deals is twofold. More often than not, they’re fixers. And, bought at the right price, a newly renovated distressed property has the potential to generate pretty good returns when it’s sold. Of course, since they do tend to be out-of-date, smaller, neglected homes, they’re also typically priced to reflect their condition—oftentimes, at significantly less than market value. Being able to potentially buy a fixer-upper at a discount and turn it into a profit-making sale is what makes distressed real estate investing attractive.
If you want to buy foreclosed homes in Southern Indiana to rehab and sell, however, you’ve got to know where to look. And, since Indiana is a judicial foreclosure state, it’s likely going to be with your local Sheriff’s office that you’ll find foreclosed properties for sale. Lenders in Indiana can’t simply repossess a house when a homeowner fails to pay. They have to first sue the homeowner in court. Assuming they win the lawsuit and the house enters foreclosure, the property next goes to auction as a part of the county Sheriff’s Sale. The sale benefits the bank since they’re awarded the proceeds, making at least some of their money back. It can benefit you, too, since the auctions are open to the public and starting bids are usually low. Buy low enough and you could potentially see high returns when you sell.
And, here in Southern Indiana, the two largest county Sheriff Sales that regularly auction locally foreclosed homes can be found in two of our biggest cities: my hometown of Evansville and nearby Bloomington. Here’s what you’ll need to know to pick up a home from either:
Vanderburgh County Sheriff’s Sale
The Vanderburgh County Sheriff’s Sale is held once a month, typically at 10:00 a.m. on the last Thursday, at the Civic Center. During the hour prior to the sale, you’ll need to submit your sealed bid to the data entry clerk. Don’t be late or your bid won’t count. Unlike some Sheriff Sales, you aren’t required to officially register before the sale, but you will need to prove your identity if you win a house. So, do come prepared to show your I.D. And, if you’re the only bidder, the home is yours. When multiple parties are interested in the same property, however, verbal bidding begins promptly at 10:30 a.m. But, if you get outbid on one deal, there’s always a chance to buy another—and on the same day. Sometimes as many as 30 properties get auctioned in one morning. And, you can always find the list right on the Sheriff’s website.
As straightforward as this sale seems, you’ll still hit a few snags trying to nab a good deal. First, since there is no way to know whether you’ll get outbid or not, to take home one house you might have to bid on several. Of course, then you risk being obligated to purchase them all. And, since all sales are final, there is no backing out and you’ll have to pay up by that afternoon. So, along with your I.D., be sure to bring a certified cashier’s check or bank check—then steel yourself for the possibility of having to pay more. As the new owner, you immediately become responsible for any back taxes and liens, tenants or squatters, and renovating a house you probably didn’t inspect since the Sheriff does not provide access.
Monroe County Sheriff’s Sale
The Monroe County Sheriff’s Sale, also held monthly, takes place at the Curry Building every third Friday. Auctions begin promptly at 10:00 a.m. here, too, but are assisted by a third-party organization called SRI. It’s on SRI’s website that you’ll find the list of foreclosed homes for sale in Monroe County—and in counties across six other states. SRI’s website is also where you’ll place your starting bid. The site isn’t hard to navigate even if you’re an old hat like me. But, keep in mind that while you start the process there, you must be present in Bloomington on the day of the auction. You’ll need to bring valid identification with you as well as a cashier’s check for the full amount of your bid. And, within two hours of the sale, you’ll have to hand that check over if you want to buy the house you bid on.
Unfortunately, you won’t likely get to bid on—or buy—too many deals at this sale. And, even if you could, you might not want to. More often than not, less than 10 homes are scheduled to get auctioned each month and, of those, more than half are canceled by the day of the sale. So, it’s always going to be possible that the funds you saved to purchase a property could have been better spent elsewhere—say, on a house that actually is for sale. Of course, with the inventory of foreclosures at this auction so small to begin with, even if the house you want remains available, you’ll probably face some stiff competition to get it—even though none of you will be given the chance to see it.
Clearly, there are several issues with buying foreclosure auction homes that should direct you away from even trying—and they aren’t limited to these two auctions. But, the biggest risk that I take issue with is lack of access. If you can’t perform an inspection on the property you’re thinking of buying, the potential of losing big on a home you’ve won is too great. What may look like a minor fixer from the street or in pictures could actually be a major hassle to repair. If there is structural damage or black mold due to flooding in the kitchen or basement, your rehab costs could skyrocket out of reach. Even the little things can add up to break the bank if you paid too high a price just to seal the deal. So, I never buy a house that I can’t inspect first.
And, really, the best way to ensure you can see what you’re buying is to deal directly with distressed homeowners. That way you can correctly calculate all your costs to make sure you purchase and perform renovations at the right price. You also get to help them before things go from bad to worse. Of course, you’ve got to have a way to find motivated sellers before they lose their homes and have an investment valuation tool on hand to offer a price that’s fair. I know where you can get both, right here in Southern Indiana.
Buy Direct from Homeowners for the Best Deals
I feel pretty lucky. When I came home to start investing in real estate, I knew right away that buying foreclosed homes in Southern Indiana to rehab and sell was not going to do it for me. Like Gary, I asked a more experienced investor for his take on it first. Granted, he wasn’t a close buddy. But, he was established well enough that I was sure he wouldn’t steer me wrong. And, I was right. Rather than pushing me to go after foreclosed properties, he showed me how to buy directly from distressed homeowners before the bank forecloses and ensure it’s a good deal: become an independently owned and operated HomeVestors® franchisee.
As a HomeVestors® franchisee, I get access to a few different tools that make all the difference to my bottom line. First, I get access to some of the best marketing tools and resources, like the nationally-known ”We Buy Ugly Houses®” marketing campaign that helps homeowners in distress find me. And, because they find me, I’m able to inspect what I’m buying.
Of course, I then perform my inspections with my second favorite HomeVestors®’ tool, ValueChek®. That helps me buy at the right price, stay on top of my rehab costs, and sell so that I realize potentially good returns. It also helps to keep distressed Southern Indiana homeowners out of foreclosure and sometimes even puts a little green back in their pockets. It’s a good thing when everyone can walk away from a real estate transaction feeling satisfied that they had made the right decision.
To connect directly with distressed homeowners and get access to some of the best tools in the business, like ValueChek®, contact HomeVestors. You’ll feel lucky that you did.
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