VA properties - anyone with advice? - Posted by AB


#1

Posted by AB on March 05, 1999 at 22:23:25:

Thanks for the info. I think this guy may be trying to yank us around. He says 10% down is a fixed thing on a VA and can not be waived. He also says that VA will not entertain bids for less than the stated amount at any time. He says that you have to wait for them to lower the price, you can’t bid your own amount.

Same guy showed us several HUD homes. He says HUD will not take much less than 2-3% below the stated amount. He tried really hard to talk us out of bidding on a house that has just been listed, and he had not yet seen. It was pretty obvious he was excited over this one. He said that due to the “tremendous amount of paperwork involved, I will not submit a low bid on a HUD property”. I think we need to keep looking for one of the 5% of realtors that will work with us.


#2

VA properties - anyone with advice? - Posted by AB

Posted by AB on March 04, 1999 at 21:31:28:

We are going to look at several VA properties tomorrow - we found a realtor we think is a good one (he owns 15 rentals himself, and routinely “Flips” properties). My question relates to the bid process. He says that the price listed is the minimum bid - you have to bid more than that. Is this correct? How much above should one bid? What potential pitfalls (other than 10% down) are there to be aware of? I am on Active Duty in the Service, does this make a difference?

This is our first opportunity with VA properties, so we would appreciate any help/advice.

Thanks in advance


#3

Re: VA properties - anyone with advice? - Posted by Gordon

Posted by Gordon on March 06, 1999 at 12:06:15:

Hey, hows it going?
In response to your request, don’t believe everything everyone is telling you. The VA may be different in your state or area.

As a matter of fact, I have been putting in bids on VA foreclosed properties since last May. I just closed on a 3 bdrm 2 ba home here in CA 2 weeks ago. In fact, I’m getting ready to go over there as I write this letter, to fix it up.

If you are an investor you must put down 10%. But, thats just the down payment, it cost me close to 18% because you must also pay brokers fees/commissions.

However, I have to say that in my area these properties are selling well below FMV after fixup.

The FMV on my property after fixup will be approximately $70,000, the asking price from the VA was $42,000, I bid 10% less and won the bid.

You can bid up to 10% less than the asking price. Will you win the bid? That depends on how many other people are putting in bids on that particular property. I believe that I happened to be the only one placing a bid on that house.

It’s a nice house, will probably cost me about $3500 to $4000 to fix up including carpet/linoleum, landscaping, interior painting, outside touch-up, and replacing oven and dishwasher, and other misc. repairs. I will rent it out for $650 a month, my PITI is $350 due to high tax estimates, next year it will go down app. $50 a month, this leaves me with $300 a month PCF at this time, and $350 next year. Not to mention appr. $25,000 equity in the property (this is after subtracting all of my investment money).

Not too bad for a VA foreclosure even with what I have invested.

Try finding other houses where you can net such a profit each month.

The only draw back for me is the high down for investors. You could ask the broker to accept his/her commission in the form of a note and you could make them payments over a period of time.

I think the best bet for purchasing properties with no or low down is directly from the seller. Easier to work out a deal. Especially if you can find a VA or FHA non-qualifying assumable loan. These are GREAT!!!

My second house purchase was one of these. I spoke with the seller, she wanted out, bought a new home, this one was sitting empty. She had appr. $20,000 of equity in the home, but, get this, she only wanted a cashiers check for $2,500 (thats right two thousand five hundred dollars) and for some one to take over payments.

Well, I looked at the house and it was great, a small 2 bdrm (argh!) with a very large backyard, one car garage, only took appr. $2,500 for fixup.
I jumped on the deal. Just signed the papers and handed her a check while she handed me the keys to my new home. Thats it, no credit check, no tedius paper work, no dealing with mortgage companies. WOW!!!

It was too easy, and my phone rang off of the hook with prospective tenants the very first day my ad ran in the local paper, appr. 35 calls a day!

Well, I’ve had that house rented now for about 9 months. No problem. Good tenants. Oh sure every now and then I fix something minor.

I am now searching for some multi-unit buildings, much faster way to build PCF (positive cash flow).

Sorry for all of the extraneous information, just wanted to share with you some of my experience, may help, or motivate. The point is, is that there are many ways to purchase properties, some of them might be right in front of your face as you read the Sunday paper!

Good-Luck. Happy hunting!!!


#4

Re: VA properties - anyone with advice? - Posted by Joe(IN)

Posted by Joe(IN) on March 05, 1999 at 08:05:10:

Tell you what I know. . .

I’ve bought a couple VA’s and have bid on a few others. The way I understand it is this(may be different in other states, I’m in IN). When a property is initially listed all bids are collected and opened on a particular date a couple weeks later. I’ve been told that VA will not consider lower bids than the list price on that date. Then, if the property is not sold they consider bids on a daily basis, and will consider lower bids. After a period of time if not sold they may lower the price a few thousand dollars, and start the process over.

I have not found any VA properties to be huge bargains. They are usually asking top dollar for a dump, and because they are offering great financing thet usually get thier top dollar before it comes down to my price range. At any point in the process they know what they must get for the property, and they will not accept offers below that amount. They are also pretty tight lipped about giving hints as to where that magical number may be.

Another point: They do not always require 10% from investors. The realtors get a listing sheet from the VA. On that sheet, many times they note that they have waved the “required” 10% down from investors. In this case the down pmt will be listed at often times just $500 to $1000 in my area. Keep in mind though that there is still that VA “funding fee” of 2 1/2% they charge you as well.

I have a bid in on one now. I’m paying fair market value, but I did it because of the financing. I will get into a $70000 property for about $3500. Then I will L/O to a buyer for $4000 plus monthly cashflow. Works for me.

No Expert! Just my $.02

Joe


#5

Re: VA properties - anyone with advice? - Posted by Dennis

Posted by Dennis on March 04, 1999 at 23:39:50:

The cost you pay depends on whether you are buying the property as an investment or as your primary residence.I believe there is no down payment for a veteran, if it is your primary residence other than a funding fee.These properties are sold “AS IS” with no warranties. Va provides a list of what they believe is wrong with the proprty called “AR’S”. I would pay close attention to them.I am a veteran and I just purchased a VA foreclosure and got a pretty good deal. Good Luck!