It seems that in Minnesota (MN), BANK OWNED FORECLOSURE LISTINGS can be bought on the cheap! Traditionally, when a bank owned (REO) foreclosure listing goes to the market, the foreclosure asset manager will list the property with a brokerage, which in turn will put said property on the MLS. Thus, if buyers like to SEARCH THE MLS for Minneapolis/St. Paul/Twin Cities foreclosures, that listing will show up.  The asset managers will work with a real estate broker to market their foreclosure that way for 90-365 days.  If the foreclosure property cannot sell during that time with listing price reductions and/or rehab and updates to the foreclosure, then the bank/asset manager might turn to an auction company to sell their foreclosure.

We have a listing in Eagan, MN that is a Fannie Mae bank owned (REO) foreclosure. This Eagan Foreclosure Town Home was updated with new paint and carpet and listed on the MLS for $99,000. It was then reduced on the MLS to $93900, then to $77900. After 106 days on the market, the bank said  it’s auction time.  Fannie Mae selected Hudson and Marshall http://www.hudsonandmarshall.com to sell this property at thier FORECLOSURE AUCTION in Bloomington, MN @ the Sheridan on 2/5/2011.

We blogged about this Eagan, MN Foreclosure property back in November. Click on this link to see video of interior http://mnforeclosureproperties.com/185/.

Well, today this unit was “sold” for $21,500 ***subject to bank approval*** at the Bloomington, MN foreclosure auction. Who says their isn’t great deals out there! If you are a Minnesota Real Estate Investor, looking for deals the pump out POSTIVE CASH FLOW, it doesn’t get any better than this! This Eagan, MN foreclosure listing would likely generate $900/mo in rent, taxes are about $100/mo, HOA dues about $200/mo and mortgage payments on $21500 over 30 years @ 6% = $129/mo, also adding liability insurance $50/mo, you are sitting on a CASH FLOW Eagan, MN good investment property. RENT $900, less $479 in total expenses = $421 in positive cash flow per month or $5052 cash in your pocket every year! (and that’s not taking into account tax depreciation)! Also, don’t forget about appreciation! How much do you think this unit will be worth in 10 years? $90k? $150?

I know how to help you find these deals!  I have all the systems in place to teach you how to be a grade A landlord and how to mitigate renter headaches. If your looking to make some real $$$ via real estate investing, please contact me today @ 612-924-7140 jdschuster@cbburnet.com

Here is an interesting scenario, you put in an offer on a bank owned, reo, foreclosure home, you offer is higher than any other offer, and you don’t get the home? This allegedly happened to a couple looking to purchase a Brooklyn Park, MN Minnesota twinhome. The Star Tribune reported that The Minneapolis Area Association or Realtors will be holding an ethics hearing on the matter. Realtors, agent, brokers are required to presents “any and all written offers” for real estate. The buyers for this Brooklyn Park, MN listing had brought the “highest and best offer” and found out that a lower bidder got it.

From The Star Tribune, 11/26/2010, 

Couple lose out on home; Realtors face ethics case

“From the moment Erica and Mike Lenzen saw a foreclosed twin home for sale in Brooklyn Park, they thought it should be theirs. They even put in a no-strings-attached offer $8,000 above the asking price. But the home was sold to someone else. The Lenzens got suspicious when they learned the house sold for $2,000 less than their offer. When Mike Lenzen tracked down the bank representative in charge of selling the property, she told him she had no record of receiving the couple’s offer. Despite all the regulation and disclosure, buying a home can be a secretive process. Buyers are largely at the mercy of what sellers and their agents tell them. It’s especially mysterious these days, as foreclosed homes flood the market and the banks that own them make sales decisions that sometimes defy explanation. Most buyers who lose out on a deal just move on. The Lenzens spent weeks investigating the transaction and scrutinizing documents. They are convinced their offer was withheld by the bank’s agents at EXIT Realty Metro. They’re not quite sure why, except that the winning bidder, an investor who plans to rent it out, had no agent, allowing EXIT Realty to earn a larger commission.”

http://www.startribune.com/local/north/110890349.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUac8HEaDiaMDCinchO7DU

If you are thinking of buying a foreclosure home, condo, townhome, twinhome or land, you need a good buyer’s agent to ensure your offer is presented and received and that you have all the info to put in the best offer. It is important to work with a Realtor/real estate agent that knows REO Foreclosure properties. Although there will be other listings in the Brooklyn Park area for these buyers and I am sure they search the MLS daily for new bank owned deals, they felt they were slighted in this deal and they want justice! Brooklyn Park borders on Brooklyn Center, Fridley, Champlin, New Hope and Maple Grove Minnesota. – John Schuster is the #1 Listing Agent with Coldwell Banker Burnet in 2010 and is a leader in Foreclosure/Bank Owned/REO properties and listings.

It looks as if Twin Cities (Minneapolis  & St. Paul Saint Paul) Foreclosures (REO) activity is on the rise.  What does this mean for you if you are an investor or home buyer?  A good deal!

Yesterday, there was an article in the Star Tribune by veteran reporter  ( Jim Buchta • 612-673-7376  jbuchta@startribune.com )

http://www.startribune.com/business/107117148.html?page=1&c=y

“With foreclosures still entering the market at near-record pace, inventory levels continue to rise. And even though the number of new listings slowed last month, total inventory is 10.6 percent higher than last year at this time. That, coupled with a decline in sales, has caused the supply of houses on the market to increase from 6.1 months in October 2009 to 8.2 months last month. That means that at the current sales pace and inventory levels, there are enough houses on the market to last 8.2 months if no new inventory were added.”

Twin Cities housing prices are going to continue to decline, it’s simple supply and demand.  Bank owned REO  foreclosures, short sales continue to rule the market.  With an increasing supply of these distressed sales on hand, regular sellers can have a difficult time competing!  Investors have been picking up investment property (Duplexes, Triplex, FourPlex 4-plex) and such a discount, they CASH FLOW with very little money down!  First time buyers can now purchase affordable homes!  (although if they are using FHA financing, which they all are, the home must be in FHA -able condition) – John Schuster, Top REO Broker in the Twin Cities area!

Q3 Minneasota REO Foreclosure stats are out and MN Twin Cities (Minneapolis and St. Paul) Hennepin County, Ramsey County, Dakota County, Carver County, Washington County, Anoka County and Scott County bank owned properties are on the rise. 

St. Paul’s Pioneer Press stated:

“Foreclosures in Minnesota are on the rise again, climbing more than 23 percent in the third quarter from a year earlier, with the metro area driving the upward trend. Statewide, foreclosures in the third quarter hit the second-highest level on record at 7,254. The only quarter with a higher level was the third quarter of 2008, when the state reached 7,349 foreclosures, according to Friday’s report from HousingLink, a Minneapolis-based nonprofit that studies housing issues.”

Full article http://www.twincities.com/business/ci_16533752?nclick_check=1

This could spell trouble for the Twin Cities real estate marketplace.  Real estate prices might not start to see an upswing for years to come and Bank Owned REO Foreclosures continue to pull down on home, townhome and condo values!  The upside? If you are a real estate investor looking for Single Family Homes, Duplexes, Triplexes, Fourplexes and other multifamily properties can get a sweet deal!  If you looking for CASH FLOW investment properties, you can actually find them now! If you are a home buyer (and do not need to sell a home to buy a home) there may never be a better time to buy! 

If you are looking for Fannie Mae or Freddie Mae (GSE) bank owned REO foreclosure, they have direct access via:

http://www.homepath.com/state/mn.html

http://www.homesteps.com/hm01_1featuresearch.htm

or if you like to search the MLS for Minneapolis, St. Paul, Twin Cities foreclosures, you can search the broker reciprocity Twin Cities Housing database via: http://mnforeclosureproperties.com/hnav/search-foreclosures/

or if you would like a custom search set up, please contact John Schuster, Coldwell Banker Burnet @ jdschuster@cbburnet.com 612-924-7140 www.johnschustergroup.com www.TwinCitiesListed.com www.TwinCitiesCondoShop.com 3033 Excelsior Blvd #100, Minneapolis, MN 55416

DUPLEX OF THE WEEK – 620 Buchanan Street NE, Minneapolis MN http://mnforeclosureproperties.com/tc/spw/3961292/index.do

If you like to SEARCH THE MLS and have been looking for a Minneapolis Duplex for sale,

this could be the one!  This is a bank owned foreclosure REO Minneapolis Duplex and has just

been reduced to $94900!  This duplex has 1-3 bedroom unit and 1-2 bedroom unit.

Incentive! Seller Will Pay 3.5% of Sales Price Toward Closing Costs w/Own/Occupy Buyer. Great NE Mpls Up/Dn Duplex Investment Opportunity. Spacious Flrplns,Lg Rms,Hwf,Off-St Pkg,4 Seas Porches,More! Mins to U of M,St Anthony Main,DT,Shops/Entertainment

If you are looking for investment property and searching for Minneapolis cash flow duplexes, contact John Schuster @

jdschuster@cbburnet.com 612-924-7140

Have you ever wondered how the foreclosure process works in Minnesota?

Information sourced from http://www.realtytrac.com/foreclosure-laws/minnesota-foreclosure-laws.asp

Pre-foreclosure Period

In Minnesota, a court foreclosure begins when a lender notifies the borrower of the default.  The lender then files a court action against the borrower. If the court rules against the borrower, a sale is scheduled. The majority of Minnesota foreclosures are handled out of court through a power-of-sale clause contained in the mortgage. Under most mortgages, a lender must mail a default notice to the borrower before scheduling the sale.With both types of foreclosure proceedings, the borrower can stop the foreclosure any time before the foreclosure sale by paying the default amount, plus fees and allowable costs.

Notice of Sale / Auction

The notice must include the borrower, owner, and lender names; the original loan amount; the mortgage date; recording information; the default amount due; a property description; the time and location of the sale; and the redemption period.  The notice must be published for six weeks, and the occupants of the property must be given the notice in person at least four weeks prior to the sale. The county sheriff or sheriff’s deputy conducts the foreclosure sale between 9:00 a.m. and sundown at a public place, usually the sheriff’s office. Anyone may bid at the sale, and the property is sold to the winning bidder. If not the lender, the winning bidder must be prepared to pay the full amount in cash or cashier’s check. The sheriff may postpone the sale by publishing a notice in the newspaper where the original notice of sale was published. After the sale, the sheriff gives a certificate of sale to the winning bidder. The certificate of sale effectively transfers ownership and possession rights to the winning bidder after the redemption period. In Minnesota, a borrower usually has a six-month redemption period, but some property types and mortgages allow for a 12-month redemption period. During this time, the borrower can redeem the property by paying the total amount of the bid plus interest and any applicable costs.

For more info on Sheriff’s Sales in the Twin Cities (Minneapolis & St. Paul) 7-County metro area please click on the links below:

Hennepin County Foreclosures, Hennepin County Sheriff’s Sales http://www4.co.hennepin.mn.us/webforeclosure/

Dakota County Foreclosures, Dakota County Sheriff’s Sales http://www.co.dakota.mn.us/Departments/Sheriff/Services/ForeclosureSales.htm

Anoka County Foreclosures, Anoka County Sheriff’s Sales http://www.co.anoka.mn.us/v3_sheriff/civil-process-sheriffs-sales.html

Carver County Foreclosures, Carver County Sheriff’s Sales http://www.co.carver.mn.us/county_government/s_civil_process.asp

Washington County Foreclosures, Washington County Sheriff’s Sales http://wcsheriff.info/

Scott County Foreclosures, Scott County Sheriff’s Sales http://www.co.scott.mn.us/PublicSafetyJustice/CountySheriff/civilprocess/Pages/ListsofSheriff’sSales.aspx

Ramsey County Foreclosures, Ramsey County Sheriff’s Sales http://www.co.ramsey.mn.us/sheriff/Foreclosuresales.htm

If you are facing foreclosure – TIME IN NOT ON YOUR SIDE! Short-selling your home may be the best option. If you are behind on your mortgage payments and you think your mortgage company/bank might foreclose on your home, contact a Minnesota Short Sale agent / broker ASAP – John Schuster, Coldwell Banker Burnet 612-924-7140 jdschuster@cbburnet.com

The Minnesota foreclosure machine for the most part has not been affected by the recent halt to foreclosures by some of the big mortgage players (Bank of America BAC, PNC
Financial, Chase). This is mostly because Twin Cities foreclosures (actually all Minnesota foreclosures) happen in a redemption state. If the owner has cause, she or he can likely get the sheriff’s sale postponed and after the Minnesota sheriff’s sale has happened, the prior owner has 6 month’s to “redeem” themselves and take back title to their home. MN NPR has an interesting article about this issue.

http://minnesota.publicradio.org/display/web/2010/10/17/foreclosures/
For more info on Hennepin County Foreclosures, Hennepin County Sheriff’s Sales,Dakota County Foreclosures, Dakota County Sheriff’s Sales, Anoka County Foreclosures, Anoka County Sheriff’s Sales,Carver County Foreclosures, Carver County Sheriff’s Sales,Washington County Foreclosures, Washington County Sheriff’s Sales,Scott County Foreclosures, Scott County Sheriff’s Sales,Ramsey County Foreclosures, Ramsey County Sheriff’s Sales http://mnforeclosureproperties.com/?p=161 

Here is an interesting interview with PBS and HUD Secretary Donovan

All in all, the foreclosure are going to keep coming. I think we will see a little more QC done during some of the legal filings and such, but the banks are going to take back homes where someone is not paying their mortgage. For the most part Twin Cities (Minneapolis and St. Paul), Hennepin County / Ramsey County / Dakota County / Washington County / Anoka County / Carver County / Scott County foreclosures (REO) listings will continue to work their way through the legal process and be resold on the open market. Coming into the winter market with an ever increasing inventory has created some fabulous opportunities for investors to pick up some excellent CASH FLOW properties with little money down. I think we have about 2-4 more years of this market. The best deals will be in the next year to 18 months before Minnesota foreclosures start to tapper off. If you have good credit, a little money, time to put into an income property and you want to wealth in a decade from now, talk to a good Minneapolis / St. Paul Twin Cities Minnesota real estate broker. – John Schuster

Looking for steal of a deal on your next home? Do you think buying your next Minneapolis Home, Minneapolis Condo or Minneapolis Town Home at a real estate auction can save you tons of money? Maybe so, especially if that auction is a foreclosure (REO) Auction! Hudson and Marshall just left the Twin Cities (Minneapolis and St. Paul) on their Midwest home selling spree!

Here you can see a listing @ 140 10th Street S, South St. Paul MN that was last actively listed @ $119,900 that “Sold” at the Minnesota foreclosure auction at almost half price! This is what I call “Cheap MN real estate”. Note that most real estate foreclosure auctions have a “reserve” price and if the property does not fetch the reserve price – the seller (i.e. the foreclosing bank) can decide if they want to accept, reject or counter the auction sale price.

Auctions can be a great deal and a major headache! First, you must do ALL of your due diligence (buyer inspection) prior to bidding. You might need to pay an inspector to inspect a home that you do not yet own – and might be outbid at auction! Second, you most likely need to be a Cash buyer of real estate as auction sales cannot be contingent upon financing. And third, most auctions have a “buyer’s premium” added to the sales price which is usually 5%. This means if you are the winning bidder at the auction for $100000, this home will really cost you $105000.

Know what your doing if you buy via auction…and if you don’t find a good Realtor that navigate all the Twin Cities auction pitfalls for you. – John Schuster

My team and I have begun to notice that many first time buyer homes are now selling in multiple offers!  In fact multiple-multiple offers – one bank owned (REO listing) had 11 offers!  If the property is move in ready and is priced way below the other active listings – it sells fast!  Banks have been getting wiser to have their inventory of homes in better condition and have them priced correctly out the door!  Fannie Mae, a lender that The John Schuster Group, with Coldwell Banker Burnet, represents in the Minneapolis and St. Paul area, has stringent requirements for how their properties must look.  The goal is for the foreclosure not to look like a foreclosure!  Our inventory has been drying up in the Twin Cities:

http://online.wsj.com/article/SB124044612611045827.html

One might think that we are nearing the bottom because the foreclosure inventory is drying up.  One would be wrong to think that!  All of the big banks and mortgage holding companies (including Fannie Mae and Freddie Mac) have had a moratorium on foreclosures from mid-November, 2008 to April 1, 2009.  They are all so backloged with 5+ months of defaults (on properties that were not foreclosed on during the moratorium), plus new defaults that a tsunami to reo’s are-a-coming!

Expect a high number of sheriff-sales in the next couple of month, then a cure time of 2-6/months for redemption (depending on if the property is abandoned), then about another month of time for cleaning and market evaluations (BPO, Broker Price Opinion and an appraisal) and then it his the market.  I predict we will have a flood of new REO’s mid-fall 2009.

http://online.wsj.com/article/SB123975395670518941.html?mod=googlenews_wsj

-Year to day (4/26/09) John Schuster and his team have sold over 68 properties in 2009, many of them being “bank owned foreclosures”. Schuster and his team have sold foreclosure homes, town homes and condos this year in Minneapolis, St. Paul, New Hope, Maple Grove, Savage, South St.Paul, North St. Paul, Maplewood, White Bear Lake, Woodbury, Bloomington and Uptown. You can follow John Schuster on Twitter @ Twitter@jdschuster

For the past 6 years, I have advised my clients to use Tim Walz with Suburban Home Inspections.  Walz offer thermal scanning for buyers during their inspection.  Thermal scanning can “see behind the wall” and expose preexisting damage or issue that might get passed up on a normal buyers inspection.  Walz / Suburban Home Inspections has recently done inspections for my clients in St. Paul, Minneapolis, Savage, Eden Prairie, Bloomington, SW Minneapolis and other cities throughout the Twin Cities.  When you buy a bank owned home you are buying AS-IS.  Know what your getting into or don’t buy the home.  Thermal Scanning cost a bit more than the normal buyers inspection, but it is well worth it.  See the results of some of Tim’s famous Thermal Scanning finds @

http://www.homeinvestigator.com/ThermalImageScanning