Re: Thinking of Buying a 2nd… - Posted by Rich[FL]
Posted by Rich[FL] on May 31, 2006 at 17:30:41:
I’m doing fine! I purchased the MH home I was working on right after I returned from the convention and have been working to get it rentable ever since. Just yesterday, I signed a lease with some great kids who will be moving in tomorrow. Now I’m on the prowl for more MHs! (I’m also on the prowl for MH insurance that doesn’t cost an arm and a leg! I’m now “uncovered” on two of them.)
I guess I didn’t see the part about it going to sale in 2 weeks. Otherwise I wouldn’t have mentioned anything about trying to buy the first; in any event, it wouldn’t hurt to ask. They may be willing just so they won’t have to shell out any money themselves for fix-up costs before selling (some banks don’t even try).
That said…if you only buy the 2nd and wait for the sale, you’re not investing; you’re “speculating”, hoping someone will bid more than what the bank is owed which will, of course, go to you. You’re not in control of the deal at that point; it’s more like you’re shooting craps in Vegas. On the other hand, you may have insight into the investing climate in this area; are there a lot of people bidding on foreclosed properties? Are prices regularly bid up above the bank’s payoff? If so, this might work. But again, you’re at the mercy of someone else.
If the LTV of the 1st is really as low as you state, purchasing the 2nd and bringing the 1st current should put you into a pretty good ownership position with great equity built in. From that point, you can control the deal, making payments to the 1st while you do any required fix up work. At that point, you could rent it or sell it for full price to an owner-occupant, or another investor. Alternatively, you could wholesale the deal to another investor and pick up some quick cash.
One way, you (and your money) is at the mercy of someone else; the other way allows you to retain control.
Hope this helps clarify things a little more for you.