Upcoming Foreclosures

Bank owned properties?

Recently, I have been looking at buying bank owned houses in my area. The properties are almost ripped bare (broken and scratched floors, appliances removed, holes in the walls, carpet, shower heads, lights stolen or windows broken...) The price seems as though the builders or owners were in bed with the bank or mortgage lenders to get money and split (felt like third world thugs) the spoils. None of the properties were worth the money they are asking for as one has to put few hundred thousands to renovate them. Are you observing the same? And john McCain wants to buy these using our money?

Public Comments

1. I just take the price I expect to be able to get when its finished, subtract the cost of the materials and labor it will take to get it to that level of condition, and add 20% for my profit as the general contractor. If the price is more than that, I don't buy it. I think there will be lots of these properties available in the months to come, don't overpay unless you have a crew you have to keep working to avoid them leaving you for other jobs.
2. One of the problems of foreclosure is not that the owners were in bed with the banks, but that the owners had foreknowledge about the foreclosure (after all, they knew they weren't going to pay). Since they knew they would be foreclosed and evicted, many decided to take anything and everything of value and of course since they owned the house, no one could stop them. I have heard anecdotal evidence of people coming back after the foreclosure to take plants, lawn strips and similar.
3. Of course. That's one of the primary causes of the financial meltdown. I've seen plenty of houses that never were worth more than $300,000, but during the bubble people were paying $400,000, $500,000, and even more for them. My personal opinion: The real villains were the buyers who lied about their income, who lied about their assets, who knew they couldn't afford the properties, who knew they couldn't afford the payments, but went ahead anyhow and bought. They were aided by real estate agents and lenders, both of whom were more than willing to let the buyers get in way over their heads just so they could earn their commissions and fees. Then those bad loans got bundled and sold on Wall Street for billions. However, I'm probably in the minority as to where to assign blame. Still, you're right. Now, one thing that often happened is that the owners trashed the houses as they went into foreclosure. The owners were angry and upset at losing their homes, so they decided to punch holes in the walls, smash light fixtures, etc. If you're interested in investing in those properties, it's true you have to take into account the damage. But that's usually insignificant. A $350,000 property with $20,000 in damage looks pretty bad. But if you can buy that property for $200,000 and put $20,000 into it to fix it back up, you've still got a great bargain. Just make sure you know what the ARV (after repair value) of a property is, and the amount of repairs it needs, going in. Hope that helps.
4. Yes, i will buy when the prices make a huge drop. Right now , no one agrees with me and the bank prices are too high. i am waiting..
5. I totally agree. In Colorado I am seeing the same thing. The foreclosure prices haven't fallen enough to make any profit on them. The only strategy right now seems to be to fix up and rent the place out for a few years. But still I think prices need to come down. There are too many stupid people who watch too much HGTV and think they can make $100k without even doing work on the dump they just bought. I've seen so many people who aren't even fixing, they are just trying to flip a hellhole. What a joke, all those places are still on the market. They aren't going to sell anytime soon.