Andrew J. McLean, author of “Making Money in Foreclosures, Second Edition,” has written 17 real estate books over many years. He has been a real estate developer, appraiser, sales agent and property manager. Unfortunately, his latest book greatly disappoints because it is superficial, incomplete and unrealistic.
For example, when he explains how to buy at the foreclosure auction, he says, “Avoid foreclosures where you’re unable to inspect the interior of the premises because it’s inaccessible.” That’s good advice. But he completely neglects to explain how prospective bidders can gain access to a mortgage default property before the foreclosure sale.
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Most homeowners who are about to lose their residences at foreclosure sales aren’t friendly to prospective foreclosure sale bidders.
Some of the information in what should have been an outstanding book is downright wrong. To illustrate, on foreclosure sale buyers, McLean says, “The bidder must then hold the certificate for one year before he will be issued the deed to the property.” That’s not correct for the majority of states.
Most defaulting borrower redemption periods after a mortgage foreclosure sale are much shorter, often around six months. There is usually no redemption period after a trustee’s sale on a foreclosed deed of trust. The book should have included a state-by-state chart of redemption periods.
Only approximately half of the book is about acquiring properties at the three stages of foreclosure sales. The balance of the book is about other topics, such as mortgage finance and how to manage real estate investments. I’m sure I’ve read much of this irrelevant material in McLean’s other real estate books.
To put it diplomatically, much of the information is out of touch with today’s realities.
For example, in the chapter about financing, McLean says, “Rule of thumb: Refinance your existing mortgage loan when the market rate for new mortgage loans is at least 2 points below the rate on your existing loan.” What does that have to do with acquiring foreclosures? Where has McLean been for the last 10 years, when it paid to refinance to reduce payments even when interest rates dropped as little as one-half of 1 percent?
But it gets worse. In a chapter about renting foreclosure properties to tenants, the author says, “For example, your sign might say ‘Vacancy, 1-bedroom, Kids OK’ or ‘Vacancy, 2-Bedroom, Adults Only.’ ” That is a flagrant violation of the federal Fair Housing Act, and most state fair-housing laws, which prohibit discrimination based on family status.
If you want to learn the basics of foreclosure sales procedures, this book is a very basic starting point. But don’t take everything you read in it to be the gospel truth.
To illustrate, the author says you can buy at a foreclosure auction with a 10 percent cash deposit and 30 days to pay the balance of the sales price if you are the high bidder. However, if you are bidding in California and many other states, you will be shocked to learn you must pay the full bid price at the auction. Other states give you only a few hours or a few days to raise the full bid amount.
One question that McLean never answers is how auction bidders 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 explains how bidders can obtain the necessary cash to bid at foreclosure auctions.
Chapter topics include “Learning the Terminology and Understanding the Foreclosure Process”; “Guidelines to Acquiring Foreclosures Prior to the Sale”; “Guidelines to Buying at the Foreclosure Sale”; “Guidelines to Buying Foreclosures After the Auction”; “Key Ingredients to Making a Superior Real Estate Investment”; “Inspection and Appraisal of Foreclosed Real Estate”; “Financing Foreclosed Real Estate”; “Making Improvements to the Fixer-Upper”; and “How to Profitably Manage Your Holdings.”
In the past, the author wrote several excellent basic real estate books, but he has obviously not kept up with current times. His latest book doesn’t even list the best Internet sources for locating foreclosure listings, showing how out of touch the author is with today’s foreclosure market. On my scale of one to 10, this very disappointing book rates only a five.
“Making Money in Foreclosures, Second Edition,” by Andrew J. McLean (McGraw-Hill, New York), 2007, $19.95, 219 pages; available in stock or by special order at local bookstores, public libraries and www.Amazon.com.
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