Posted by JT-IN on July 09, 2003 at 16:26:30:
Jim:
The cautions that you refer to about newbies buying foreclosures, relates to buying at the auction only. When buying an REO property, you will stipulate by contract things such as taxes being prorated, clear and unencumbered title at conveyance, and any other contingency they will agree to. This greatly reduces the risk of purchasing property. In other words, the Lender has already undergone the risk of buying at Sheriff Sale, and is now selling to you essentially the same as any other seller would; clear title, or else it doesn’t close.
Do your due diligence on the repairs, costs and comparables, which it seems like you have thus far, and you should be fine.
Just the way that I view things…
JT-IN
Foreclosure questions from a rookie - Posted by Jim - NE
Posted by Jim - NE on July 09, 2003 at 13:25:14:
First of all?Thanks to everyone who participates on this site, the information found here is fantastic!
I am new to RE investing; I have been studying up for about a year now and ready to do some deals. I am concentrating on rehabs for now. I found a property that has been foreclosed on and is now owned by a lender. Researching this site I have found some people saying that foreclosures are not a great place to start for the newbie, but of the three types of foreclosures Lender Owned is the least risky.
So far it appears to be a good deal: comps in the area go for $80k to $90k. Based on my first inspection the property needs minor cosmetic attention ? trees trimmed, paint, carpet, yard cleaned up, etc ? estimate $5k to $7k. The lender is asking $35k.
What hidden problems are out there for me to find? I don?t mean problems with the physical property; I am confidant that my contractors and I can find those problems if they exist upon furthur inspection. I am talking about back taxes, liens and these types of things. When the lender foreclosed on the property are these items taken care of by the lender? What does the lender have to disclose to me? Will title insurance uncover all of these hidden issues?
I have not spoken to the lender yet, what types of questions should I be asking them?
Thank you for any comments!
Jim - NE
Here’s my take on it - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on July 09, 2003 at 16:54:19:
Jim–(NE)------------
Here’s the question you ask the lender: “Where is the purchase contract so I can sign it?” That sounds like a super deal. Sign it up as soon as you can. Just put in an inspection contingency, so you can back out if you need to.
Good Investing***Ron Starr