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Redemption Period Cost Calculator
In states with statutory redemption, the borrower can reclaim within a window post-sale. This calculator sizes carrying costs.
Total redemption carry
$26,700
Operating carry
$19,500
Opportunity cost
$7,200
How the math works
Total = (PITI + maintenance) × months + opportunity cost of invested capital during redemption.
Auction bids in redemption-state foreclosures should be 5-10% below no-redemption equivalents. Price in the carry and uncertainty that borrower may redeem.
How to Use
- Enter redemption period months.
- Enter monthly PITI.
- Enter monthly maintenance.
- Enter opportunity cost of capital.
- Read total carry cost.
Frequently Asked Questions
Redemption periods by state?
None (most states) to 12 months (Iowa, Tennessee, etc.). Borrower has right to reclaim property by paying sale amount + costs. Purchaser can't fully own until period ends.
Who bears cost?
Purchaser of foreclosure sale. Pays to maintain property while borrower has option to redeem. Factor this into foreclosure bid strategy.
Strategies?
Discount foreclosure bids by estimated redemption carry. Pay borrower small sum to waive redemption rights. Some states allow redemption waiver at auction.
How often should I rerun this?
Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.
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