top of page

NPN Story Quick NJ Sheriff's Sale

Late Stage Foreclosure

During the pandemic, there were a lot of foreclosure moratoria that affected different parts of the foreclosure process. Although this has hindered liquidations of our existing notes, a good thing is that when we buy, we’re looking at a lot of non performing notes that are in late stage foreclosure.

In some states, everything from filing the complaint, to getting judgment, to going to sale were stopped. In other states, everything except for the final foreclosure sale were allowed. In these states, foreclosures were allowed to proceed until the last step, the Sheriff’s Sale.

At the time, though, non performing note investors had no idea when sales would start resuming. Note funds that needed to sell notes were selling late stage foreclosure notes.

Advantages of Buying Notes in Late Stage Foreclosure

Notes in late stage foreclosure save the buyer time and money. There are a lot of legal costs required to get from the start of a foreclosure to the end. When we buy that note at mid or late stage foreclosure, we don’t have to come out of pocket for those extra expenses. The previous note holders have already done that for us.

Plus, when a foreclosure complaint gets judgment, the borrower is very limited in what he or she can do to stop the foreclosure. We save the time and risk of what the borrower does pre-judgment.

Cash for Keys means Vacant House

The seller of the loan was using cash for keys as a tactic to have the home vacant and ready to go before the sheriff’s sale in an attempt to speed up liquidations. They offered the homeowner/borrower cash in exchange for them vacating the premises and agreeing to not contest the foreclosure.

This is a win-win as the borrower gets some compensation and gets to move on with his or life while the lender gets a vacant property, which is easier to deal with and sell.

Special Master Sale

Usually, foreclosure sales in New Jersey are conducted by Sheriff’s departments. During the pandemic, attorneys found different legal options that allowed lenders to speed up the process.

For this loan, our attorney suggested that we request a “Special Master” conduct the sale. This took us a couple of months longer than normal but, since the sheriff wasn’t scheduling any sales at the time, it was worth trying.

The court granted our motion and we were able to go to sale sooner than we expected.

Setting the Opening Bid in a Hot Real Estate Market

We generally try to set our opening bid a little bit higher than what a fix and flip real estate investor would bid in the hopes that a buyer occupant or a rental investor who’s willing to pay more might buy.

This way, we maximize our profits. Since the real estate market’s been so hot recently, we set our opening bid even higher.

This house needed some work but was clearly vacant and in a really nice neighborhood. We set the opening bid for $399,000 and one successful third party bidder won the auction for $399,100


We were able to get a great deal on a note in late stage foreclosure. The borrowers had already vacated the property and our attorney helped get us to sale as quickly as possible even with the challenges from the pandemic. This was another great deal for us!

Final Numbers:

Purchase Price: $278,000

Total Cost Basis: $285,972

Sold to 3rd Party at Sheriff Sale: $399,100

Net Sales Price: $382,788

Net Profit: $96,816

Days Held: 154

Return on Investment (ROI): 33.9%

Annualized ROI: 80.2%

Recent Posts

See All

Condominiums can be tricky things and require a knowledge of what makes them different from detached single-family homes. The condo...

bottom of page