Investing In Notes

How to Buy Property That “Looks Good on Paper” to Take Advantage of Investments So They Don’t Take Advantage of You

What is a Real Estate Note you ask? Well let me tell you. A note is simply an IOU. A payor has promised to pay someone else, called a seller/lender, a certain amount of money. The payor may agree to pay interest on the money, and to pay part of it back in daily, weekly, monthly, yearly installments or in one lump sum in the future. We, as note buyers, will buy that IOU from the Note Holder (i.e. the person receiving the payments) for a lump sum of cash now. How much we will pay depends on the discount we can convince the beneficiary to take from the face amount of the note.

Any seasoned real estate professional can recite a litany of anecdotes about investments that looked really great on paper, but in reality were a Pandora’s box of costly problems.

For example:

1) An investor buys a commercial property in an up-and-coming section of town, expecting to lease it for the short term and then cash in on the predictable spike in real estate values, to make money on both ends.

The following year a national development company opens a shopping mall on the other end of town, draining all the consumer traffic away and creating a rush to open stores closer to the mall. The investor’s property sits empty as the equity vanishes, replaced by monthly debts that cannot be offset.

2) A homeowner decides to fix up a garage and convert it into a rental apartment.
The extra income will be enough to pay the mortgage on the house, which will essentially transform an empty garage into an investment project that produces a steady cash flow while the equity of both properties – the house and the new garage apartment – rise.

Before the renovation is completed – but long after legal agreements are made with contractors to do the work and the building materials are delivered to the site – the local preservation society manages to get the neighborhood included in the state historical record. No new construction is allowed under the strict guidelines, which are imposed to discourage modernization. The plan to rent out the garage is now against the law, but if the contractors are not paid for their materials and contracts, they can impose a lien on the main house in lieu of payment.

3) An investor finds a vacant apartment complex in need of repairs, but the cost of
repairs is minimal compared to the immediate income and cash flow that can be
had by renting out the property to military families at the nearby Naval station.
The repairs are completed ahead of schedule and a newspaper and billboard marketing blitz is planned, in order to fill up the thirty units as soon as possible. An ad agency is hired and completes their plans.

But two weeks before the planned ribbon-cutting ceremony and launch of the publicity campaign, the government closes the base and ships the personnel and equipment elsewhere, in order to save money and streamline the organization.

Although these are fictional stories, they demonstrate the fact that although in real estate “location is everything”, it doesn’t mean that location is always a good thing, or a dependable one.
And other factors can bite into the profit margins of a real estate investment project before it reaches completion. These include unexpected spikes in the cost of repair materials (due to everything from hurricanes on the other side of the country to inflated prices at your local gas station), inclement weather (which can delay projects like pouring concrete, painting an exterior, or repairing a weak foundation), fluctuations in the labor market, and a variety of other issues.

Many investors finally opt out of the hands-on real estate game completely, or decide to at least supplement some of their investments in physical “brick and mortar” property with a portfolio of real estate debt notes or mortgage paper.

At a time when interest rates are rising – making debt instruments more attractive in the short term, many investors are looking for alternatives to low-yield instruments, such as bank certificates of deposit and Treasury notes. They frequently find higher returns and plenty of liquidity in the market for real estate paper, which not allows offers better short-term yields, but the opportunity for long-term or time-staggered investment strategies as well.

And when rates rise, the stock market has historically gone bearish. But by the time most people figure out that their gains in the stock market are dwindling, it is often too late to get into the bond market, because the bargains are gone. Those who keep a strong portfolio of real estate paper, however, can potentially profit from both economic climates, and enjoy the diversity of owning real estate as part of a well-rounded investment allocation plan, but without the day to day risk of being a developer, landlord, or rehab project manager.
Regardless of what kind of investor you are, real estate notes or “mortgage paper” can provide diversification, cash flow, and hassle-free convenience. Ask your local real estate note broker to explain how a real estate investment that looks good on paper can also be found through the global market for real estate-based paper debt transactions.

Investment Companies Providing Opportunities Banks Can’t

There are even more reasons why a trust deed investment company would be needed, even by ordinary individuals. Every lending product is different, and banks and trust deed investment companies have very different regulations covering their activities.

Let’s take a look at the imaginary scenario of a man named Jeff. He wins the lottery and splits the jackpot with a group of friends so that he walks away with 4 million, after taxes. He’s opted to receive the money in annual payments over the next 10 years. He decides he wants to use part of the money to build a 12,000-square-foot house on the shores of Lake Tahoe. However, a 12,000-square-foot, completely elephant proof house will cost him $4 million and he’s opted to take his jackpot earnings in annual payments. He doesn’t have all the money up front. So what does he do? Can he go to the bank? Maybe. But the Federal Institutions regulatory and Reform Enforcement Act (FIRREA) limits the amount of money banks can loan to any one borrower. So Jeff puts up $500,000 and approaches his good friend Millionaire Mack, asking him to lend Jeff the remaining half a million. Millionaire Mack agrees, but only if he can charge a 12% interest rate and can secure the loan with the lakefront property and home.

In real life, trust deed investment companies fulfill the role of Millionaire Mack in the above example with the difference that, in real life, Millionaire Mack would serve as the intermediary. Someone behind the scenes-an investor-would have given Mack the money to loan Jeff. This system works well for Jeff, though, because Millionaire Mack is willing to loan Jeff as much money as he needs.

Trust deed investment companies operate in a similar manner. They sky’s the limit when it comes to how much money trust deed investment companies can loan to any one borrower. They’re not under the same chokehold as banks in regards to lending limits. Some of the other reasons that trust deed investment companies might be needed instead of banks are: there is something unusual about the borrower, there is something unusual about the property, oor there is insufficient equity. These categories can include specifics like: the borrower has a low credit score (perhaps they managed their money well enough never to need credit?!), too many late payments on loans (which is a negligible risk when the property is held as security), opr a property which seems undervalued (which is easily fixed by requiring a higher interest rate or different terms). Trust deed investment companies are in a position to be flexible about these things, and so can serve a market that the rigidly regulated banks, bastions of bureaucracy that they are, can not serve.

Therefore people in unusual situations, or with specialized money-making methods, can get the money they need to keep their own millionaire dreams chugging along, all the while fueling others’ dreams in the great circle of life!

Anything Can Happen

We know that investing can actually be a very creative thing, and there is rarely a best path to making money. However, along with this creativeness comes a need for great communication, systems which work and are followed to the letter, and impeccable record keeping. Here are just a few examples of ways your investment might vary, and how a trust deed investment company makes it all very simple and safe for you.

Some trust deed investment companies charge prepayment penalties to borrowers who pay off early. Others companies, happy to get their money back waive the penalty.

Occasionally, a loan extends. A commercial shopping center that doesn’t have enough tenants to get a permanent long-term loan is a prime example. The center is leasing fast, the borrower has enough money to continue paying the trust deed loan and asks to extend the loan for six months. Who decides if the extension happens? The trust deed investment company? No, you, the investor make the call. And here’s where communication comes into play. The trust deed investment company must contact all the investors involved and ask how they want to proceed. Depending on how much money each investor has loaned, not all investor must agree to the extension in order for the loan to continue.

Communication loan extension and /or early payoffs requires efficient and timely accounting and date processing. Because commercial trust deed loans routinely involve millions of dollars in transactions, a seasoned and experienced firm that can expertly juggle these transactions is a definite asset for the investor. Consequently, customer service is as important as your investment itself. The other most important aspect of a relationship is trust. The best way to establish trust, in this case, is to check out your trust deed investment company. Ask about their license, and what was involved in getting it. Ask about their employees, how they came to be in trust deed investing, what qualifications they have, and what experience they have. Ask about their past clients: what they thought were their big successes, and what losses they have had. All this knowledge helps you feel comfortable around them, and creates a great and trusting working relationship between you both.

The best news of all is that you’re not actually paying the trust deed investment company a fee or a commission to make use of its knowledge and efficiency. The borrower pays this cost. The trust deed company does need you to make it’s money; but then again, you need it to make your money! It’s really a great situation, where everybody gets something they need.

In the end, it’s about relationships. The relationship between you and the trust deed investment company should be one of mutual understanding. The strength of this relationship will make investing in trust deeds pleasant and profitable. In fact, you may look on trust deeds as a financial form of CPR, since they can breathe new life into your IRAs and savings accounts.

When Back - to - Back Becomes Simultaneous

One of the most common investment strategies employed by those who buy and sell property for a short-term gain is back-to-back close. As the term indicates, this technique involves two closings – or completed real estate transactions – which happen at essentially the same time.

For example, many times the scenario happens wherein a homeowner decides to move, and they plan to use the proceeds of the sale to buy a new house. Once they get an offer to purchase their first home, they go shopping for another one. But they can’t afford to buy it until the sale of their first house is completed. In this kind of situation, they may elect to schedule two closings – back to back – at their attorney’s office. First they close the sale, and then they turn right around and close the purchase of their new home.

Using this kind of basic concept, investors sometimes tighten the time frame even more. Rather than buying a house and then borrowing money to fix it up to generate equity or buying one and assuming the duties of a landlord in order to make a profit, the investor simply buys a property and sells it at the same time. While signing the paperwork to buy the property, the buyer also sells it to someone else, so the entire investment cycle is completed within a matter of minutes, not months or years. The closing attorney has all the paperwork for all of the components of the transaction drawn up and signed at the same meeting, all the parties convene at the same time, and the “signing party” begins and ends and all of the buying and selling occurs at one sitting.

But another more complex variation on this strategy is what brokers refer to as the “simultaneous close”. These closings are often used as clever tools for those who sell property by using owner financing but don’t really want to carry the mortgage loan for an extended time. These sellers don’t intend to be note holders, but are simply trying to figure out a way to help their buyers come up with the financing necessary to purchase the house. As soon as the sale is completed, these owner-financing sellers are interested in selling the mortgage note to an investor who will give them a lump sum of cash in payment. This allows the seller to “cash-out” of the transaction and not assume any responsibility for actually collecting monthly payments or carrying an extended mortgage for the new buyer. Because it all takes place at one sitting, the simultaneous close is also called a “table closing”.

For this kind of transaction to go smoothly, the seller (who wants to sell the house and the new mortgage at the same time) must take care to meet specific legal guidelines that exist to prevent lenders from charging unfairly high interest rates. If the seller accepts payment for the property, agrees to carry the mortgage, but sells the note immediately, it might be construed that the seller is trying to hide from the role of “lender” to avoid compliance with all laws pertaining to fair lending practices. In other words, the seller wants the convenience of making a loan, and only for a moment – long enough to get the deal signed and done. But within that moment the seller may incur the entire legal responsibility of a lender, and not disclosing that in a totally transparent fashion can be a violation of the law.

The seller also needs a qualified note buyer – who understands the complexities of simultaneous closings and other loan instrument procedures – to purchase the mortgage. Because delays or failures to comply to rules and regulations can be costly, the seller who wishes to take advantage of a simultaneous closing is strongly encouraged to seek expert advice from experienced, certified, financially stable mortgage brokers before entering into this kind of transaction.

Those who find a legitimate broker or buyer of notes to partner with may be able to enjoy the convenience of walking away with cash in hand, but never lose sleep about the future legal or tax consequences of actions. If a simultaneous closing is not appropriate to help an investor or seller meet his or her financial goals, a qualified and competent mortgage broker will understand and recognize those facts, counsel the client, and then offer advice and alternative strategies and plans for a more desirable course of action.

Pinnacle Investments
Email: info@pinnacle-investments.com
www.pinnacle-investments.com

Give The People What They Want

The real estate market has the potential to produce such lucrative investments, that there is stiff competition for the best places, and many people who spend a great deal of time scouring their sources for potential big earners. In real estate investing, every day counts – you can’t necessarily sit on your idea, mulling it over for a week. Someone less cautious and risk averse as you will come along and snap up the offer while you are looking the other way!

Real estate developers often move fast to acquire property, or they risk losing out on a choice opportunity. The clock is tick, tick, ticking away for them. Consequently, developers may opt to avoid banks, which can take 90 to 120 days to fund a loan. Trust deed investment companies, on the other hand, can fund a loan in less than 30 days. Therefore, trust deed investment companies-despite their higher interest rates-are a developer’s best friend.

Usually, developers don’t mind paying higher interest rates because they know trust deed investment companies set up a short lending term. Unlike home mortgages, which last from 15 to 30 years, trust deed loans typically last about one year-36 months at the most. Consequently, commercial real estate developers can obtain the money as soon as they need it, knowing the high interest rate is temporary. When the term expires, they can find a lower interest rate elsewhere.

The other reason that people turn to trust deed investment companies rather than banks is that the bank won’t give them a loan. This is usually for one of three reasons – either there is something wrong with the borrower, there is something wrong with the property, or there is insufficient equity. Some things that might happen to make the institution think there is something wrong with the borrower are: their credit score being too low, or no source of income to pay back the loan. As many of you may know, there is a variety of reasons you may have a low credit score, the most incongruous of which is the fact that you have managed your money well enough to never need credit! However, most single problems can be overcome easily, with a little flexibility and lateral thinking. The only reason that banks can afford to turn away these loans is that they have economies of scale on their side – they don’t necessarily need every single loan, and they prefer very high security over much higher return on their own investments.

So basically, borrowers who need a lot of money fast are very well served by trust deed investment companies. They are able to temporarily trade off having a low interest rate for being the ones to get the deal, which they hope will make them much more money than the pittance they paid as extra interest! Neither are these loans unethical, in that they lock in people desperate for cash to overblown interest rates – they are simply fulfilling a need in the market, and serving both parties.

Thinking Outside The Box

Banks have been doing the same thing for many, many years – they have a rigid formula that loans must fit into, and because of the diversity of their operations and the need to make fairly standard procedures and rules, they tend to view the unknown with caution. Trust deed investment companies, on the other hand, are much more open-minded.

One of the reasons that investors go to investment companies (sounds obvious, huh?), instead of banks, for their loans, is that they know banks try to force loans to fit inside a tight box. In other words, every loan must fit a predetermined structure. If the loan strays outside those borders, it’s rejected. Say there is an investor who has an elephant phobia, and wants to build his house with special elephant protective features. He knows the bank won’t necessarily approve extra amounts on the loans for such an unconventional expense - but on the other hand, that investment companies are creative, innovative, and flexible. They would be more likely to approve the loan.

That’s the same reason why many real estate developers turn to trust deed investment companies rather than to banks. Loan policies at banks are set in stone. Trust deed investment companies, however, take a different approach. Remember when your kids and/or your grandkids grabbed a piece of play-Doh? Did you tell them what sort of creation they could sculpt with that rubbery piece of dough? No, you let them use their imaginations, shape it any way they pleased. Trust deed investment company loans are just as flexible. As long as we are dealing with a reputable borrower, one who has a good track record and who fits other criteria, we shape the loan to ensure that we-and most importantly, that you, the investor-don’t lose out on a good deal yet remain well secured just because the loan doesn’t fit “inside the box” of the traditional financial institution. Trust deed investment companies cheer the entrepreneurial spirit of borrowers.

Traditionally, real estate developers have had a difficult time prying money loose from banks. Often, the developers are seeking money for construction-in other words, they’re borrowing against something invisible. The borrower has a vision, complete with architectural plans and renderings, but all the bank officers can see is dirt. “Where’s our collateral?” they wanted to know.

Trust deed investment companies, on the other hand, see more than dirt. They see the developer’s vision and they know the chances are good that the successful developer will repay them. If not, they have ways of recouping the investment. Remember, the trust deed investment company can see the vision of something great on that patch of dirt – they know the same avenues that the borrower would have taken to complete the work, and they are quite willing to use those also. The work is finished, the money is made (possibly more than before, given that the investment company now takes all the profits, rather than just their margin of them) … and you have a fatter wallet or a fatter bank account statement. Or a big pile of notes to put under your mattress or up your chimney!

Mortgage Note Buying Versus Rehabbing Homes

Sometimes rehabbing a home takes longer than anticipated. The cost of materials and labor can rise unexpectedly, local ordinances can change, or other scenarios can come into play to make a project run longer than scheduled or over budget – or both. And many of the circumstances dictating how things unfold may be impossible to foresee. Weather can play a critical role, for instance, especially if you are doing roof repairs, concrete work, or exterior painting and need the help of sunny skies. When hurricanes and other natural disasters strike, even on the other side of the country, construction materials can suddenly become more expensive – the price of plywood can jump 20 percent overnight.

“ By buying the debt that finances real estate, they can participate without having to roll up their sleeves and deal with the nitty-gritty details of rehab work... ” Many projects are now on hold simply because of a rise in gasoline prices, which adds to the cost of all materials delivered by truck to the local lumberyard or home improvement store. “It can even add to labor costs, because if your contractors are commuting, they expect to be compensated for the cost of getting to and from the job site,” says Troy Fullwood. If you are working on a slender margin, a few cents per gallon at the gas pump can be enough to erase your potential profits while you work to rehab and “flip” a property.

Any delay in a real estate project leaves the investors open to vulnerability from shifting economic factors. If the housing market cools off and interest rates spike before you get your house on the market and sold, for instance, you can be left holding the bag through the downturn, with expenses like mortgage payments, insurance premiums, and property tax added to your balance sheet.

To find an alternative way to invest in real estate – without the day-to-day logistical headaches – many investors turn to paper investment, either as a way to supplement their portfolio or as a full-time business in lieu of actual physical ownership of properties. “By buying the debt that finances real estate, they can participate without having to roll up their sleeves and deal with the nitty-gritty details of rehab work,” said Fullwood. “And without financing, you aren’t a buyer; you’re just a browsing looker, so those who invest in the loans that fuel projects will always be in demand, as long as there is a market for buying and selling property.”

Especially in times like these – when the real estate market is challenged by steadily rising interest rates – mortgage note investors can earn substantial yields, taking advantage of the higher rates. And those who have prior experience as real estate investors can use their knowledge of property to help choose sound, secure, credit-worthy investments. “If the building that serves as collateral on the note is valuable, then the debt carries less risk, and those who are accustomed to rehabbing property usually have an eye for what constitutes solid and problem-free construction,” says Fullwood.

As with any debt instrument, when investing in real estate mortgages there are different rates of return, yields, timetables to maturity, and degrees of risk versus potential reward. To learn more about investing in mortgage notes, log on to http://pinnacle-investments.com.

Buying Pre-Foreclosures - The Art of Buying Before the Sale

The advantages to buying properties from homeowners in default can only be measured by the individual investor. Some do not see enough reward, some think it's too risky, while others are plagued by moral issues. Are you helping the troubled homeowner or taking advantage of his misfortune?

Both the lender and the homeowner lose in a foreclosure action. Neither want it to happen. Both parties are motivated to resolve the situation. Motivated parties are key to the process.

The investing window of opportunity opens the day the Lis Pendens, the notice that a legal action is pending, is filed. The window closes the day the property is sold at auction. The time between these two events enables an investor to work with the homeowner and lender to create a workout strategy or a purchase of the property from the homeowner before the sale date.

The amount of time the window remains open depends solely on state and local laws, as well as the behavior of the property owner. Some states sell properties within 90-120 days from the first notice of default. In New York, the process can take a year or more.

As for the moral question, keep in mind that by dealing with a homeowner in default, you not only help him, you generally rescue the loan and maintain the value of the property (and surrounding properties) as well. If there is enough equity in the property, there is the potential to work out an arrangement that satisfies all parties and allows for a handsome profit. That's what pre-foreclosure investing is all about: buying the equity in the property, working out an arrangement with the lender and the homeowner, then selling the property for a profit.

Investors follow these basic guidelines to ensure a successful purchase and sale:

Locate loans in default Evaluate choices and narrow selections Contact homeowner Inspect property and loan documents Determine homeowner's needs Calculate your selling price and profits Negotiate with lender, owner and lien holders Close the deal, repair as necessary and sell.

Locating Loans in Default
The Lis Pendens is the first public notice (document) that announces a loan in default, so it makes sense to start there. Access these notices at the county courthouse, newspapers that routinely advertise these notices or through a reputable Foreclosure Service Provider.

Evaluate Selections & Determine Potential
You know the default amount from the legal notices or service provider's information. Now you must estimate the property's market value. Subtract the default amount from the estimated market value to determine the gross equity in the property. This figure also reflects your gross profit potential. If there is little or no difference in the amount of debt and the market value, move on to another property. If there is a big difference, there may be enough equity in the property to make a sizeable profit.

Contact the Homeowner
This is easier said then done. The homeowner is probably being bombarded with letters and calls from attorneys and bill collectors and has creditors showing up at his door. The only way to contact the homeowner is by phone, mail or in person, and chances are you will have a difficult time getting in touch with him.

Start with mailings. Indicate in your letter that you are a private investor looking for property in that part of town. Let the property owner know that you may be able to help him with his financial problems.

Demonstrating an understanding the homeowner's dilemma will help your efforts. Indicate in your letter that you may be able to stop the foreclosure, save his credit rating and provide cash for use in paying his bills and/or for relocating.

Be professional and gracious in your correspondence. Invite the homeowner to call you at his convenience. If you don't hear from him in a reasonable amount of time, say three or four weeks, follow up with another letter, perhaps worded a bit more urgently. As you get closer to the auction date you may want to send two or more letters per month.

Follow up with phone calls if you can. Be courteous, never pushy. Never interview the owner on the phone. Merely state that in order to determine whether or not you can help him, you will need to meet with him at the property. Make sure he understands that the meeting will be more productive and less time consuming if he will have the loan, mortgage and insurance documents available, as well as the foreclosure notices.

If you are going to make an offer on the property, you must have the loan, ownership, and debt or lien information. You must also assess the condition of the property and the property owner. Combined with the market value and the default amount, you have all the ingredients necessary to formulate your offer.

If you feel comfortable with it, you can visit the property in person. You may be confronted by an angry homeowner. Be polite and leave if you are asked to. Never, under any circumstance, snoop around, inspect or generally trespass unlawfully on somebody's property.

Meeting the Homeowner
Use common sense and dress appropriately, something casual but not sloppy. Be sympathetic. Does the homeowner need cash? Is he waiting for a bailout? Will he go bankrupt? Find out. Review the loan and mortgage documents. Verify the loan amount, monthly payments, interest rates, taxes, etc. Review the insurance policies as well. Get all the pertinent information you can. Ask the owner if there are any other liens or judgments he may be aware of.
Inspect the property with the homeowner. Never comment on the owners lifestyle, just the physical condition of the property. Point out the obvious defects or items in need of major repair. Use an inspection checklist and record your information and estimated costs of repair.
Make no promises at this point. Make no offer or give the homeowner any money. Make an appointment to meet with him again if you think you want the property.

Preparing Your Offer
Determine the net equity in the property. This is the difference between the market value and the default amount plus liens and repair amounts.Negotiate with the lien holder. You may offer to satisfy the lien for 20% of the amount. Chances are the lien holder will lose everything when the property sells at auction. Buying out the lien puts more equity in the property and more money in your pocket.

Remember to include closing costs in your calculations for the purchase and sale if you intend to flip the property. Also included the carrying costs, the mortgage payments and taxes and insurances, while you hold, repair, and then resell. Also include a seller's commission if you use a broker.Calculate every legitimate expense associated with buying, repairing, carrying and selling the property. If a large enough figure remains, you may have a very nice deal. This bottom line figure has to pay the homeowner for his property and produce a profit for you.

How much do you offer the homeowner? Some investors itemize every expense, show their calculations to the owner and offer to split the profits. Some itemize the expenses and pay the owner the remainder on the bottom line. The investor then earns his profits by the reduction in lien amounts as negotiated, savings in repairs by doing them himself, negotiating a lower seller's commission, or selling the property himself. Others still make offers based on the bottom line, and negotiate from there.

The Purchase Contract
When the owner decides to sell, you will both need to sign an Equity Purchase or Real Estate Purchase and Sale Agreement. All parties recognized in the mortgage contract must sign.
Check with your attorney before signing any contract and make ure he is knowledgeable in real estate equity purchases.

Investing experts agree that the terms of the agreement must be clearly stated in the contract. Leave nothing to verbal understandings. Your best defense against future problems is the manner in which you present your evidence. Have everything documented properly.

Make sure to include the following in your purchase agreement:

A "Subject to" clause that allows you to bow out of the deal if something is not as originally agreed upon. This could be for unknown damages, general condition of the property or loans, termite damage, etc. A statement that allows you to show the property. A statement indicating that the property has to appraise at a certain value. The property must be vacant, all tenants and possessions out by the specified date. An agreement between buyer and seller that the payments for the current loans equal "X." A statement indicating the sale is subject to the condition of the loan and/or encumbrances against the title. A statement indicating the buyer shall pay all closing costs. A statement indicating the seller shall: Deed the property to the buyer... Authorize the buyer to record said deed at the appropriate time... Be aware that the buyer may resell the property... Be aware that the purchase price may be below market value... Leave the premises in good condition and pay for damages incurred after the contract has been signed and before the seller has left... Agree to pay for any damages or repairs necessary as discovered by termite and roof inspections... Vacate the premises on the date specified. A statement indicating all net proceeds paid to seller will be paid at closing.

Closing
Inform your attorney that you have a signed contract and that you need representation at closing. Have him prepare a Release of Lien, to be recorded at or just prior to closing, if you have negotiated a settlement with a lien holder.

Arrange your financing. If you assume the loan and have been in contact with the lender, make sure the foreclosure process is stopped before the sale date.

Order your certified appraisals and inspections as required before closing. Order the termite and roof inspections as well. Verify from a title search that there are no other lien holders against the property.

If all goes well, you probably just bought real estate well below market value.