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Their loss may be your gain

Foreclosed properties are up for auction daily at the Hillsborough County Courthouse, where luck and research can pay off.

By JANET ZINK
© St. Petersburg Times
published July 12, 2002


TAMPA -- Bargains exist if you're willing to capitalize on someone else's bad fortune and have a fistful of cash.

Foreclosed property -- homes that banks and mortgage companies seize when owners default on loans -- can be bought from real estate agents. But the real deals are at the auction block at the county courthouse, before investors and real estate agents snap them up and mark them up.

Foreclosure sales are held at 11 a.m. daily in the second-floor lobby of the Hillsborough County Courthouse at 419 Pierce St.

On any given day, as few as two or as many as 30 properties are offered, says Kevin Hurley, Hillsborough County's director of appeals and judicial sales.

A list of properties scheduled for sale for a two-week period is available in Room 198 of the courthouse. The list shows only case numbers. Prospective bidders have to gather their own details, from addresses to the condition of the property.

That's where Greg Timby comes in. He publishes the bi-monthly Foreclosure Hot Sheet and sells it for $50. The document lists relevant information, including the address, so interested buyers can at least drive by the property and view it from the exterior. Most buy without getting a look inside.

Anyone interested in bidding at a courthouse auction must fill out a bidder's form and have it ready to present to the auctioneer with their first bid. If a bid is accepted, the bidder pays a 5 percent deposit of the final bid in cash or cashier's check. The bidder has until 4 p.m. that same day to return with the balance. An objection to the sale may be filed within 10 days.

On a recent Thursday, the crowd at the courthouse included longtime investors and a handful of beginners just learning their way around the world of foreclosures.

When Timby walks in, he's immediately swarmed by would-be bidders who compare their notes with his.

"The stock market's not doing very well so there are a lot of people getting into real estate," Timby says.

That's what brought Val and Frank Trujillo to the courthouse. They've been to the auctions only a handful of times, but already they've seen a property valued at nearly $90,000 sell for $34,000.

"The more you go the more you learn," Val Trujillo says. "You have to do your homework or you get burned."

Charles Levy, a private investigator who's looking for a little extra income, has visited the auction every other day for the past three months.

"There's a lot to learn," he says.

He hasn't bought property yet, but he does buy Timby's hot sheet, since the legwork is already done.

"You waste valuable time trying to figure it out when someone else has done the work for you," Levy says.

Bill Chamberlain, a real estate agent from Brandon, has been attending three or four sales a month for the past year.

"I only come down when there are homes in the area I am most familiar with to bid on," he says. In the last year, he bought, fixed up and sold three properties and made a $15,000 profit.

He says he has seen people make $30,000 to $40,000 on one deal.

That's the kind of windfall everyone hopes for. But it's not so easy to land.

"If you're really knowledgeable and spend a lot of time on it, you can make money," says University of South Florida business professor Ken Wieand, director of the Center for Economic Development Research.

But typical buyers end up with a property in need of much repair.

"In general, why does a house get foreclosed? Because somebody doesn't want to redeem it," Wieand says.

The owners typically are in financial trouble, haven't been able to keep the house in good condition and probably haven't been able to sell it on their own, Wieand says.

"(In) that kind of a market, there are a lot of unknowns," Wieand says. "It's hard to get all the information about the property. It doesn't mean you can't get deals, but you have to be an expert."

Banks usually have a representative at courthouse sales and try to buy the property themselves. After they buy it back, they turn it over to an asset management company, which lists the house with a real estate agent or sells it directly to investors.

"Everybody thinks foreclosures are such a good buy, but sometimes the bank marks them up 10 percent over what they're worth," says Michael Sayroo, owner of Homes for Real America Inc., who has been buying and selling foreclosed properties for five years.

Nonetheless, Sayroo usually buys directly from the bank's asset management companies or real estate agents. He bought the house he lives in, a foreclosure in Odessa, one year ago for $260,000 and estimates he could sell it today for $500,000. The previous owner paid $375,000 for the house.

He bought another house in Twelve Oaks last year for $65,000 and sold it the next month for $89,900 without doing any repairs.

Ron Coleman, a real estate agent with Florida Executive Realty, specializes in the sale of foreclosed properties. He sells about 50 to 60 a year at prices range from $10,000 to $800,000.

Most though, are in the $50,000 to $100,000 range.

"Reason being, the poor guy usually has the most trouble," Coleman says.

Coleman's prices include the bank's asking price as well as an estimated cost for repairs.

"The really good deals are harder and harder to find at the courthouse because there are so many people who have the same information you have," says Keith Lentz, owner of Redfish Properties Inc., who has been buying, renovating and selling foreclosed houses for about six years.

Novices, he says, often buy a house at the courthouse and then come to him and ask him to take it off their hands at a loss.

"It's a not a business for the faint of heart," he says. "You really better know what you're doing. You have to have cash, have to have knowledge, and have to think quickly."

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