Posted by Newbie on July 01, 2002 at 18:45:24:
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NEED ADVICE - Posted by Sharonda
Posted by Sharonda on July 01, 2002 at 13:36:27:
I saw a home that is going into foreclosure sale in 2 weeks for $27K. Sales on the same street are in the mid to high $60’s. With some work(10-14K)I believe this house would fall in that price range. Any suggestions as to the best way to go about getting this property? It seems to be a real steal and I really want it. I have the money to purchase and rehab but since this is my 1st deal, I am really not sure where to begin. Any advice would be welcome. Thanx.
HOME OWNER??? - Posted by Juan
Posted by Juan on July 02, 2002 at 08:36:08:
If you have met with the homeowner, you could possibly workout a short sale or reinstate it and take over the payments. If you let it go to the courthouse, what’s to say another investor might not outbid you at the courthouse.
If you are not comfortable with rehabbing, why don’t you try wholesaling(flipping) the property to another investor, or partner with someone who has done some rehabs and learn from them. If you are a member of a REIA I am sure there might be someone there that could help you.
Re: NEED ADVICE - Posted by waynepdx
Posted by waynepdx on July 01, 2002 at 14:58:16:
Or you can get some hard money and attempt a short sale.
Document exactly what problems need to be fixed and estimates from contractors for each.
Bundle this all together and send off with an offer to the mortgage company.
You may be able to get them to down to 10k or less.
You of course have it wrapped up in a P&S agreement.
Go get a loan (hard money or conventional) for 70% or more. This will give you cash in your hand. You then either rehab it or sell it.
Make sure you get a good budget figured out on it with holding costs for 3 or 4 months.
Re: NEED ADVICE - Posted by GL(ON)
Posted by GL(ON) on July 01, 2002 at 14:42:05:
Have you spoken to the owner? IF they realise their position and just want to get out before they lose the place, you may be able to get it for the value of the mortgage or a little more.
If you can make a deal with them, talk to the mortgage company and arrange to assume the mortgage. I take it from your message that you would have no problem doing this?
The reason is that you should guard your cash and use credit as much as possible.
If you don’t qualify for a mortgage you can try to buy subject to the existing mortgage but that is a separate topic all its own.
Re: NEED ADVICE - Posted by Newbie
Posted by Newbie on July 01, 2002 at 16:06:24:
When estimating repairs, how can a newbie decide what needs to be repaired? I have heard that some repairs are just not worth the money to do because they add little to no value. Would an appraiser be able to give advise on what NEEDS to be updated/repaired to give the property the most bang for the buck? If not an appraiser then who?
Thanks,
Newbie
Re: NEED ADVICE - Posted by GL(ON)
Posted by GL(ON) on July 01, 2002 at 18:20:17:
Fixing a leaky roof will not add to the value, because you assume a house comes with a good roof. On the other hand a bad roof should detract from the value.
Some things you have to fix even though they don’t “add” value. In that case, you have to make sure you find them before you buy and deduct from the price you pay so you don’t get stuck.
A home inspector is supposed to find them all. A contractor is another good one. An appraiser will deduct for any “baddies” he finds but will not normally be an expert on construction and repairs.
Try hiring a licensed inspector and follow him around asking questions and taking notes. Obviously you only do this on houses you have an accepted offer on. Put a clause in the contract,making it conditional on passing inspection. After a few times you should have a pretty good ideal what to look for.