Stack of $100 billsIf you’re a Minneapolis duplex owner who is losing his investment property to foreclosure, did you may be able to sell it for a profit?

In Minnesota, when a duplex owner is delinquent on mortgage payments, the lender on their property will schedule a sheriff’s sale.

At that sale, which is usually held in the county sheriff’s office, a representative for the bank will, in essence, bid for the right to redeem the mortgage six months later and take control of the duplex.

From that date, the duplex owner has six months to come up the money to pay off, in full, the amount bid at the sheriff’s sale.

Most of the time, that figure is equal to the amount of the mortgage on the property.

Sometimes it’s less.

Why would the bank representative ask for less that what the duplex owner owes?

Because believe it or not, banks are not interested in owning more real estate. This seems especially true if the duplex is located in an area that has experienced a number of foreclosures.

When this happens, the duplex owner may, in essence, sell either pay that amount, or sell their rights to redeem the loan.

Failure to do so means the first lien holder (usally the bank with the first mortgage) is next in line, followed by the second mortgage holder (if there is one) and anybody holding any other kind of lien on the property.

And if that duplex owner happens to sell the property for more than the amount that was bid at the sheriff’s sale, he or she is entitled to pocket the difference (less any additional penalites, interest, fees and commissions).

For some duplex owners there’s an even better outcome. Many buyers are willing to let them stay on as tenants.

For many distressed duplex owners, this is the happy ending they’ve been hoping for.