Posted by jasonrei on October 22, 2003 at 21:06:25:
Well, in my county there are hundreds of Notice Of Defaults recorded each month. What I used to do was narrow it down to about 300 that had promise. I’d drive by 90% of them and do a value and repair estimate. Out of the 150 remaining that had promise I’d do a quick title search, and end up with about 120 on my list. I’d figure out what I could pay and still realize a decent profit. I’d go to the auction with my money and list. Probably 40 of them would come up, most for way over what I was willing to pay. Of the 8 that I’d actually have a chance to bid on, I’d be outbid on 6 or 7. So all that work for one deal. That said, I’d end up making $12k-$30k profit after everything. These are homes I bought for $25k-$60k.
Pre-foreclosures: I got one with a $38k balance. The owners deeded me the house for $3k, I reinstated the loan for $4k, did about $12k in repairs, and had about 6 months holding costs. Netted about $18k on an $82k sale. Got another with $72k balance, $6k arrears, $0 to get it deeded to me, $10k repairs, sold for $110k in 2 months.
I did the preforeclosure/foreclosure auction thing for about 9 months. It took my partner and I about 2 weeks (full-time) each month, and we got 5 houses with profits of about $100k. Not too bad, but foreclosures are also somewhat risky (it’s so much nicer going through a formal closing with title insurance and tax certs).
Just a guess here, but I think if all I did was knock on doors, I’d get a couple of houses a month with $15-20k profit. When I get more time, it’s definitely something to get back into.