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OPA buys property, turns $6-8K profit on foreclosure sale

(Oct. 8, 2015) Following months of work and cooperation between multiple parties, the Ocean Pines Association is poised to recoup thousands in bad debt on a foreclosure property it bought, fixed up and now has under contract to a potential buyer.
After struggling to collect assessments from some delinquent properties, the association bought a home located at 37 Tail of the Fox Drive at auction earlier this year.
General Manager Bob Thompson said the move could be seen as a test for similar moves to recoup funds in the future.
“About four months ago the board had approved to do a foreclosure,” Thompson said during an orientation meeting last month. “This was our first case in many years and what we did is, when we looked how far in arrears they were, we saw there was some value in the property.”
Thompson said he went to Snow Hill for the auction with a certain “strike point” in mind.
“[We knew] if we worked within this amount we were going to make an offer to buy it from foreclosure,” he said, adding that three properties were on the table that day, with three bidders in attendance.
“Since that time we’ve gone onto the property, we’ve made repairs to it, we’ve done all the things that we needed to, listed it for sale [and] the property is under contract,” Thompson said (settlement was scheduled for Sept. 30 but the sale has yet to be confirmed).
Thompson said the association should have a profit of between $6,000 and $8,000. He said the property owner was approximately $10,900 in arrears for assessment and fines and that the work done on the home was already paid for as well.
The money gained from this sale would be placed against bad debt accounts, Thompson said.
“Overall, this is a process we hadn’t done before,” he said. “We were fortunate in this one.”
Board member Jack Collins said that Ocean Pines passed when another property came up in similar circumstances roughly a month after the first one.
“We backed off because we didn’t have the experience, and the value was … very close,” he said. “I think we did a good job in this particular instance.”
Thompson said when the property was purchased the board included Realtor Sharyn O’Hare and builder Marty Clarke. Collins, a former banker, also provided assistance.
“It was kind of a collective effort to analyze the whole thing,” Thompson said. “It came to the board and we sat for probably about 45 minutes and kicked it back and forth and … talked about pros and cons and decided to move forward.”