212: Receivership Real Estate: The Hidden Inventory Only Experts Know About w/Jake Flothe

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 29 April 2024

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

When housing inventory is low, where do you go? Foreclosure rates are down, short sales are a hassle, and the open housing market has barely any sellers—is there a better way to find deals? Yes! Enter real estate receivership—the hidden housing inventory that our own James Dainard has been using for years to get better deals than what’s on the market. How do they work, and what’s behind these discounted deals? Attorney Jake Flothe works with receiverships daily and has seen the inside and out of these transactions that most real estate investors know nothing about. In short, receivership is when a court-appointed receiver takes control of a property in order to sell it to pay back creditors on the borrower’s behalf. This alternative to foreclosure and bankruptcy helps many real estate investors and everyday Americans escape a financial bind and can bring better properties to your investment portfolio. Jake gets into the nitty gritty of why someone would go into receivership, how to finance these discounted deals, the vast benefits of receivership over foreclosure or short sales, what the bidding and buying process looks like, and the one clause that could kick you out of an amazing receivership deal. In This Episode We Cover: The hidden inventory of “receiverships” that most investors have no idea about Why receivership real estate may be an even better deal than foreclosures The bidding process and how to start putting in offers on these discounted deals A BIG reason why foreclosures are down and receiverships are “ramping up” One clause that could completely ruin your receivership deals Why YOU may need to consider receivership if your deal goes sideways And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Forums BiggerPockets Agent BiggerPockets Bootcamps Join BiggerPockets for FREE On The Market Join the Future of Real Estate Investing with Fundrise Connect with Other Investors in the “On The Market” Forums Subscribe to The “On The Market” YouTube Channel Dave's BiggerPockets Profile Dave's Instagram James' BiggerPockets Profile James' Instagram BiggerPockets' Instagram What is a Foreclosure? The Complete Guide HousingWire CEO: This Inventory Shortage Could Last Decades Connect with Jake: Jake's LinkedIn Jake's Website Jump to topic: (00:00) Intro (01:50) What is Receivership? (06:05) Can You Finance It? (07:40) Better Than Short Sales? (11:54) Bidding and Buying (16:36) Receivership is “Ramping Up” (21:20) The “Bump” Clause (23:33) Fewer Foreclosures? (24:36) How to Buy Receivership Properties Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-212 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey, everyone, it's Dave.
0:08.7	Welcome to On the Market.
0:10.5	Today, I'm joined by James Dainerd and James.
0:14.4	Thank goodness you're here today because we are getting into a part of the real estate
0:18.7	investing world that I truly know nothing about. We're going to be
0:23.5	talking about receiverships, and you were really excited to talk about this topic. Why do you think
0:29.7	this is important for our audience to know? Right now, deal flow is really hard to find,
0:35.4	and, you know, as investors, we have to shake every branch right now to find
0:39.7	that deal. And what we are seeing, or at least what we've been seeing, is we're buying a lot more
0:45.1	product that's from investors that's half stabilized or half renovated or, you know, an investment
0:51.3	deal that went bad and the lenders are trying to dump it off.
0:58.4	And so we've been able to find quite a bit of inventory through receiverships.
1:03.3	It's something that a lot of investors just kind of bypass, but you have to look at all these deals because some of the best deals we've ever done have been bought out of receivership.
1:07.8	And they've also been some of the smoothest deals we've ever bought as well.
1:11.3	Cool. Well, I'm excited to learn about it. And obviously, you know something about buying and
1:16.3	selling with receivers, James, from your personal experience. But to help us understand this topic,
1:22.5	we're bringing in an attorney, Jake Flothi, who is a receiver and has really intricate knowledge of the process
1:31.2	side of receiverships, the legal things that you need to consider as an investor, and has some
1:37.9	tips for you if you either find yourself in a situation where you need a receiver or as a buyer
1:42.9	if you want to potentially buy a
1:45.7	property in receivership. So with that, let's bring on Jake Flothy.
1:58.9	Jake Flothy, welcome to On the Market.
	...

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