3 Stages Of Bankruptcy Where Acquisition Opportunities Arise | Propertylogy

3 Stages Of Bankruptcy Where Acquisition Opportunities Arise

By on October 3, 2017

If you have an eye to purchase properties belonging to owners facing bankruptcy, you need to know when the window of opportunity arise for you to make your play.

But be mindful that it is best to consult the expertise of an attorney familiar with the bankruptcy laws in the local area before making a move.

The risks you are taking by not getting sound legal advise is the possibility of homeowners thinking that you are working on behalf of the lenders in a manner that compromises their right to bankruptcy protection.

You can be taken to court for such actions. You have been warned.

So please. Do talk to a lawyer who knows his stuff.

Here are 3 stages of a bankruptcy process where your best opportunities to buy surface.

1) Possession stage

Homeowners will retain possession of the property upon filing for bankruptcy.

At this phase, they can consider, negotiate and accept offers to buy the house.

However, creditors will be notified of of potential sales. And they have to ultimately approve the sale.

At this early stage of bankruptcy, you will seldom be able to strike a bargain deal as the situation has yet to be at it’s most dire.

2) Liquidation stage

This is phase when assets are being liquidated for cash so as to pay back the creditors what they are due.

The trustee takes control over the property and will have the task of selecting the best offer among all offers on the table.

While creditors are able to raise objections to a sale at this point, the trustee have the power to overrule their objections.

This is why this stage is usually the best time for opportunistic investors to get involved.

At the same time, the power of the trustee includes the capacity to reject offers, and also award the property to creditors.

It would be a huge task to convince trustees to accept your offer. But it’s not impossible.

You will find yourself having to deal with creditors at one point or another to appease them.

3) Post liquidation

If a creditor ends up with possession of the property after the liquidation stage, you will then have to buy the house from them if you still want it.

Unless the creditor is in the real estate business, holding onto the property is the last thing on their minds.

They would most likely be looking to sell as soon as possible.

Businesses for example, have their own operations to optimize. Having real estate on their books don’t just make their financials look weird, it can also require extra resources to manage.

Ultimately, creditors really just want to get their money back.

So if you are able to build rapport with the creditors, they would usually be more than willing to sell unless you are trying to lowball your way into the real estate hall of fame.

Finally, it’s worth mentioning again that you should consult with an attorney who is well-versed with local bankruptcy laws before jumping into this special market.



You May Also Like...

hair1 eye1 abs1
Latest Singapore home loan rates
Hidden items that bring up mortgage costs
Hiring a competent agent
How to burn more calories in the office

Send this to a friend