Andrew J. McLean, author of “Making Money inForeclosures, Second Edition,” has written 17 real estate books over manyyears. He has been a real estate developer, appraiser, sales agent and propertymanager. Unfortunately, his latest book greatly disappoints because it issuperficial, incomplete and unrealistic.
For example, when he explains how to buy at the foreclosureauction, he says, “Avoid foreclosures where you’re unable to inspect theinterior of the premises because it’s inaccessible.” That’s good advice.But he completely neglects to explain how prospective bidders can gain accessto a mortgage default property before the foreclosure sale.
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Most homeowners who are about to lose their residences atforeclosure sales aren’t friendly to prospective foreclosure sale bidders.
Some of the information in what should have been anoutstanding book is downright wrong. To illustrate, on foreclosure sale buyers,McLean says, “The bidder must then hold the certificate for one yearbefore he will be issued the deed to the property.” That’s not correct forthe majority of states.
Most defaulting borrower redemption periods after a mortgageforeclosure sale are much shorter, often around six months. There is usually noredemption period after a trustee’s sale on a foreclosed deed of trust. Thebook should have included a state-by-state chart of redemption periods.
Only approximately half of the book is about acquiringproperties at the three stages of foreclosure sales. The balance of the book isabout other topics, such as mortgage finance and how to manage real estateinvestments. I’m sure I’ve read much of this irrelevant material in McLean’sother real estate books.
To put it diplomatically, much of the information is out oftouch with today’s realities.
For example, in the chapter about financing, McLean says,”Rule of thumb: Refinance your existing mortgage loan when the market ratefor new mortgage loans is at least 2 points below the rate on your existingloan.” What does that have to do with acquiring foreclosures? Where hasMcLean been for the last 10 years, when it paid to refinance to reduce paymentseven when interest rates dropped as little as one-half of 1 percent?
But it gets worse. In a chapter about renting foreclosureproperties to tenants, the author says, “For example, your sign might say’Vacancy, 1-bedroom, Kids OK’ or ‘Vacancy, 2-Bedroom, Adults Only.’ ” Thatis a flagrant violation of the federal Fair Housing Act, and most statefair-housing laws, which prohibit discrimination based on family status.
If you want to learn the basics of foreclosure salesprocedures, this book is a very basic starting point. But don’t take everythingyou read in it to be the gospel truth.
To illustrate, the author says you can buy at a foreclosureauction with a 10 percent cash deposit and 30 days to pay the balance of thesales price if you are the high bidder. However, if you are bidding inCalifornia and many other states, you will be shocked to learn you must pay thefull bid price at the auction. Other states give you only a few hours or a fewdays to raise the full bid amount.
One question that McLean never answers is how auctionbidders can obtain the necessary cash to bid at foreclosure auction sales.Although he spends a major portion of the book discussing mortgage financing,probably to fill what would otherwise be a very thin book, he never explainshow bidders can obtain the necessary cash to bid at foreclosure auctions.
Chapter topics include “Learning the Terminology andUnderstanding the Foreclosure Process”; “Guidelines to AcquiringForeclosures Prior to the Sale”; “Guidelines to Buying at theForeclosure Sale”; “Guidelines to Buying Foreclosures After theAuction”; “Key Ingredients to Making a Superior Real EstateInvestment”; “Inspection and Appraisal of Foreclosed RealEstate”; “Financing Foreclosed Real Estate”; “MakingImprovements to the Fixer-Upper”; and “How to Profitably Manage YourHoldings.”
In the past, the author wrote several excellent basic realestate books, but he has obviously not kept up with current times. His latestbook doesn’t even list the best Internet sources for locating foreclosurelistings, showing how out of touch the author is with today’s foreclosuremarket. On my scale of one to 10, this very disappointing book rates only afive.
“Making Money in Foreclosures, Second Edition,” byAndrew J. McLean (McGraw-Hill, New York), 2007, $19.95, 219 pages; available instock or by special order at local bookstores, public libraries and
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2007 Inman News