Wholesaling HOA Foreclosure Properties in Minnesota

The short answer

Can you wholesale an HOA foreclosure property in Minnesota?

In most cases, yes. The owner usually keeps title until a sale and redemption period end, so you can contract to buy and assign, as long as the lien is paid at closing. Ask the association for a current payoff and have a title company confirm it.

Minnesota’s Common Interest Ownership Act, chapter 515B, governs condos and planned communities. Under 515B.3-116, an association’s lien for unpaid common-expense assessments can rank ahead of a first mortgage, but only up to six months of assessments. The association can foreclose the lien like a mortgage under chapters 580, 581 or 582. Our HOA foreclosure guide gives the big picture.

Redemption matters here. For unit owners, the redemption period in these foreclosures is generally six months, or a shorter period if the law allows one. During that time the owner can still pay and keep the unit. Read about redemption periods and how foreclosure auctions work before you promise anything.

The opportunity

Why HOA foreclosure leads work in Minnesota

Many Minnesota condo owners face rising dues, special assessments for roofs and siding, and tight budgets after a job loss or divorce. A unit can look worth far more than the debt, yet the owner may not know the options. In St. Paul, townhome communities near Highland Park and the east side have a mix of owner-occupants and landlords. Both groups can be open to a clean exit if you are clear about costs and timing. Most cases need patience and a lot of paperwork, so start with the association’s records.

Lead sources

Where to find HOA foreclosure leads in Minnesota

• County foreclosure notices. Sheriff sale notices are published in the county’s legal newspaper. Watch Ramsey, Hennepin and Dakota counties.
• Association managers. Some managers will tell you who is behind. They may not, so never pressure them for private details.
• Lien records. Look for recorded assessment liens at the county recorder. Our lis pendens guide shows what to watch.
• Landlord owners. Landlords with several units can fall behind on one. See tenant-occupied property and absentee owner leads.
• Direct mail. Short, friendly letters reach owners before an auction. See our direct mail guide.

Your exit

Who buys HOA foreclosure deals in Minnesota

Landlords, flippers and owner-occupant buyers can all want a condo near the University of St. Thomas or downtown. Check the association’s rules early. Some communities limit rentals, and a buyer who cannot rent the unit will walk away. Our buyer buy box guide helps you match deals to investors.

Ask the association for a statement of account and the governing documents before you market the deal. A buyer will want to see dues, reserves and any pending assessment. Order a title search too, since a first mortgage may still be in place. See our title search guide.

Step by step

How to start wholesaling HOA foreclosure properties in Minnesota

1. Pull the notice. Get the foreclosure notice or recorded lien and note the dates.
2. Reach the owner. Ask what happened and what they hope to do. Be honest about what you can offer.
3. Get the payoff. Request an itemized statement from the association.
4. Run the numbers. Use the ARV calculator and the MAO calculator with dues in mind.
5. Contract and disclose. Sign a purchase contract with assignment language and tell the owner you may assign.
6. Find the buyer. Send a full package to your list. See writing a wholesale offer.
7. Close with title. Use an investor-friendly title company that pays the association from the proceeds.

Marcus found a two-bedroom condo off Snelling Avenue where the association had started a foreclosure on its lien.

The association wanted $9,800, a first mortgage still sat at $112,000, and the unit was worth about $198,000. He offered $158,000 with a short closing, signed on a Thursday and told the owner he planned to assign.

A landlord who owned two other units in the same building paid a $7,500 assignment fee. Title paid the association and the lender, and the owner kept roughly $29,000 and avoided losing the unit at a sheriff’s sale.

Minnesota rules to know

Minnesota association, foreclosure and licensing rules

Chapter 515B, section 3-116, sets the lien priority. Foreclosure notices run six weeks, with service on a person in possession at least four weeks before sale under Minn. Stat. 580.03. If tenants occupy a foreclosed home, section 504B.285 generally requires at least 90 days’ notice after the redemption period. Ask an attorney how these rules apply to a particular unit.

The state licensing law can presume a person is selling real estate as a business after five or more principal transactions in 12 months. That presumption is in section 82.55 and we found no guidance that applies it to wholesalers, so check with Commerce or an attorney. We also found no wholesaler disclosure statute, but check current text. See our license rules guide and attorney guide.

Learn it with a mentor

Study condo deals with a mentor

Condo liens have many moving parts, so students bring us association documents and we review them together.

FAQ

HOA Foreclosure Properties in Minnesota: common questions

Keep going

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