On a recent weeknight, about 30 people gathered at the Hotel Huntington Beach to learn about foreclosures.
The speaker was Ward Hannigan, a nonpracticing lawyer from San Diego who says he has bought 500 foreclosure properties in 25 years. Those investments have made him a wealthy man, he says.
But anybody who walked in thinking that buying distressed properties was a route to easy profits heard a different message from Hannigan.
"What it takes is almost an ironclad, grit-your-teeth determination to make money in foreclosures," he told the group.
Hannigan, a lively speaker who salts his talks with humor, walked his audience through the process of buying foreclosed properties at auction. As he described it, it's practically a full-time job.
Before bidding, a prospective investor should have driven by on which he plans to bid and researched any liens at the county recorder's office. She needs to have cashier's checks in her pocket to cover the full purchase price if she turns out to be the winning bidder.
And all that preparation is often for naught, as properties are frequently taken off the auction block at the last minute for a variety of reasons, including an agreement a homeowner has worked out with a lender to get out of default.
When he does buy a property, an investor might need to rehab it or evict the previous owner before he can prepare it for sale.
All of which makes it difficult to hold a day job.
Hannigan's talk attracted both experienced investors and those who were just starting to think about buying foreclosures.
Among the latter group was Jerry Tagliaferri. He recently got a real estate license after years of running a television repair business in Huntington Beach.
"Times are slow," Tagliaferri said of the market for home sales. "That's one of the things that steered me over into possibly, well, finding foreclosures."
Tagliaferri, who runs Springdale Realty Inc., attended Hannigan's talk to "see if it's feasible to do flipping or find a unit at the right price for a client who might be interested."
Tagliaferri has been attending foreclosure auctions in Placentia each weekday morning but hasn't seen much bidding. The vast majority of homes that are auctioned get no bids and become property of the lender, he said.
Those few properties with enough equity in them to attract bids are fought over fiercely. "It's really tough right now," he said.
In one sense, this was Tagliaferri's lucky night. He won a drawing for a free four-hour meeting with Hannigan, who typically charges $250 per hour for one-on-one training.
Jim Pollina drove down from San Luis Obispo County to hear Hannigan speak, the third time he's done so.
For the past dozen years, Pollina has been doing so-called hard-money lending, helping homeowners with equity avoid foreclosure in return for 12 percent interest.
"It's mind-boggling that there are so many people that actually go to foreclosure with a lot of equity still in the property," he said. For a long time he wondered why, but concluded there is no answer.
"From the viewpoint of someone who wants to invest in foreclosures, you just accept it as a given without asking why," he said.
Investing in foreclosures is something Pollina is still considering. "I definitely want to see if there's a conservative way of doing it without losing money," he says.
Of Hannigan, Pollina said: "He seems to be a little arrogant. … He holds back information. … I think he kind of teases the more serious people to get them to take his seminars, which are very expensive."
"But I'm seriously thinking of doing it. … It could be worth every dime if he really shows you techniques and gives you solid knowledge, and you get a leg up on the competition," Pollina said.
Hannigan's talk was sponsored by County Records Research, a Huntington Beach company that sells information about foreclosure properties to investors.
Kurt DeMeire, co-owner of County Records, said attendance was down from previous talks a few months ago, even though the number of properties going into foreclosure is up. That's because people are afraid to buy property, even at the discounted prices possible through foreclosures, because they think home values will continue to tumble.
"Those are the kind of people who come in when the market's already recovered, and they've lost the opportunity," DeMeire said. "People always get in at the wrong time."
Contact the writer: 714-796-6045 or firstname.lastname@example.org