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Old 12-17-2007, 09:10 AM   #1
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Buying Foreclosure property


I have heard a lot about it. Started tracking and keep looking for it.
I am not able to find any property which has great value.
I was wondering if you guys have any experience with such kind of property.
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Old 12-17-2007, 11:41 AM   #2
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Buying Foreclosure property


You buy as is, where is and no warranty.

It can be risky or rewarding depending on how much homework you do on the property prior to buying.

How handy are you?
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Old 12-17-2007, 12:33 PM   #3
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Buying Foreclosure property


Ayuh,........ I haven't bought anything from a Foreclosure sale........

But,...... I've had Great Luck buying properties at County Tax Sales.......


I picked up the house behind the houseboat for the Accessed Value, which was about 1/2 the Appraised value, Which has nearly doubled since then............
I also picked up the beige/ brown place for the Accessed value the same year from the little ole lady who fell,+ couldn't care for herself anymore......
That 1 is now actually Making money every month.........
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Old 12-17-2007, 02:32 PM   #4
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Buying Foreclosure property


I bought a foreclosure this past summer. Just make sure you do your homework and know what you are getting into. We had a lot of work to do, but knew that going in. We bought it about $30,000 below what other homes in the neighborhood sell for. Still have an official inspection so you know the problems the house has going in. Dealing with banks is like pulling teeth, they dont move fast unless you agree to all their terms unconditionally, but we loooove our house! During the winter months while we were looking to buy it, the pipes burst and we had to wait and wait while the bank selling it dragged its feet. Finally they paid for the repairs because they didnt have it properly winterized and we closed on it. We plan on having it reassessed in the summer to see if all our hard work is paying off and what kind of equity we have built up with all the money and sweat we have put into it.

Good luck searching!
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Old 12-17-2007, 02:41 PM   #5
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Buying Foreclosure property


some of the basics we had to fix.

new oil tank
new water heater
replace sewerline in basement
updated kitchen, bathrooms
fence around yard
new gutters
replaster/paint walls
landscaping
needed new front door
chimney repair
more insulation
new water pipes
etc

Many times foreclosed homes have been neglected homes as the owners had no money to keep them up. Though I'm sure not all.
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Old 12-17-2007, 11:28 PM   #6
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Buying Foreclosure property


Normally in go to the banks' reo properties on their website, so far I haven't find anything closed to assessed value(tax assessed value).
Where else do u guys look for it?
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Old 12-18-2007, 05:58 AM   #7
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Buying Foreclosure property


I think HUD has a foreclosure website.
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Old 12-18-2007, 06:33 AM   #8
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Buying Foreclosure property


Be aware that the attractive picture of purchasing a "fixer-upper" at a significantly reduced rate (from the value of comparable homes in an area) ....is generally NOT what purchasing a fore-closed home is usually all about.
Many people think that they are buying a fixer upper when purchasing a fore-closed home. Bare-in-mind: In most cases, such homes have suffered years of neglect, and possess outdated heating, electrical, and plumbing systems. Leaky windows and poor/no insulation could also crop up, in addition to hazardous types of construction materials (asbestos/lead paint).
Again, this is not always the case, but is par for the course when treading in the "fore-closure" swamp.

Seen it, worked on it, advised against it. Had a client last month, trying to purchase a forclosed 3 family. They had their heart set on purchasing some-kind of multi unit "improvement" project. They wanted to do it on their "Limited budget". I advised them against it (based on their having only a limited budget), once I found the house was not just fore-closed, but condemned because of frozen pipes, among other things.
The lesson: On normal fixer uppers, you would allow a 20% overage on your estimated improvement budget. On a foreclosed property, a more realistic percentage is to allow a minimum of 50% for overage costs.... So even tho you may make a purchase at bargain basement prices, you may also end up spending alot more later on, once you start your "upgrades and improvements". Approach all foreclosures with a "Buyer Beware" mentality;
It may be a genuine bargain, it may also be buying someone elses problems...

Last edited by AtlanticWBConst.; 12-18-2007 at 06:37 AM.
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Old 12-18-2007, 07:17 AM   #9
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Buying Foreclosure property


Quote:
Originally Posted by AtlanticWBConst. View Post
Be aware that the attractive picture of purchasing a "fixer-upper" at a significantly reduced rate (from the value of comparable homes in an area) ....is generally NOT what purchasing a fore-closed home is usually all about.
Many people think that they are buying a fixer upper when purchasing a fore-closed home. Bare-in-mind: In most cases, such homes have suffered years of neglect, and possess outdated heating, electrical, and plumbing systems. Leaky windows and poor/no insulation could also crop up, in addition to hazardous types of construction materials (asbestos/lead paint).
Again, this is not always the case, but is par for the course when treading in the "fore-closure" swamp.

Seen it, worked on it, advised against it. Had a client last month, trying to purchase a forclosed 3 family. They had their heart set on purchasing some-kind of multi unit "improvement" project. They wanted to do it on their "Limited budget". I advised them against it (based on their having only a limited budget), once I found the house was not just fore-closed, but condemned because of frozen pipes, among other things.
The lesson: On normal fixer uppers, you would allow a 20% overage on your estimated improvement budget. On a foreclosed property, a more realistic percentage is to allow a minimum of 50% for overage costs.... So even tho you may make a purchase at bargain basement prices, you may also end up spending alot more later on, once you start your "upgrades and improvements". Approach all foreclosures with a "Buyer Beware" mentality;
It may be a genuine bargain, it may also be buying someone elses
problems...

ABSOLUTELY CORRECT! I have a plumber coming today to work on the sewer line. But we knew this going into the foreclosure we bought. You HAVE to budget for repairs. get an INSPECTION, and a good one. Even if the bank is selling it as is, get yourself the inspection. Worth every penny!!! We have put nearly $20,000 into ours in repairs, but we budgeted
for that. We love the neighborhood and the people around us and fixing this house will be worth it in the long run. We plan to raise our kids here when that time comes.
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Old 01-22-2008, 11:23 AM   #10
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Buying Foreclosure property


Out first home is a foreclosure.

$40,000 off of market....otherwise, it would have been out of our price range.

Luckally, this was a new construction home. The guy that lived here initially fell prey to the common misconception that you can own cheaper than you can buy...which is true if you consider your mortgage payment only. He bought the home here in Texas but worked construction out of state. According to the neighbors, he lived here a total of about 3 weeks over a year and a half. There was hardly ANY damage to the home. When we had the inspector come out...he told us it was the second cleanest house in terms of issues he had seen all year long.

Buying a foreclosure has been a GREAT thing for us. We have a ton of equity already built in to this home and we were able to moved into a house that will last us a bit longer than we would have been in a cheaper home. We like to say it's a 10 year house, not just a 5 year house.

I've suggested a foreclosure to all of our friends who are considering, but I warn them of many of the same things mentioned above. The best bet I've found is that you find a real estate company that specializes in foreclosures...it makes things a lot easier.
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Old 01-22-2008, 11:33 AM   #11
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Buying Foreclosure property


I'll add - do not purchase "lists" from shady dealers specializing in foreclosures.

Tax sales and auctions of siezed property are a better bet.
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Old 01-22-2008, 11:40 AM   #12
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Buying Foreclosure property


my brother in law, a real estate agent... in Texas... currently owned 7 or 8 houses... as he bought a lot of foreclosure houses... for business reasons... he might visit me at Toronto in Feb. going to ask him how he is doing... ....

May be this idea is perfect for region like Texas... who don't have cold climate to freeze the water pipe... how can you abuse a house in this type of weather.....

Last edited by KUIPORNG; 01-22-2008 at 11:43 AM.
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Old 01-22-2008, 12:14 PM   #13
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Buying Foreclosure property


You can absolutely abuse a house here in Texas. While we don't have deep freezing temps we have our fair share of bad weather. Wind and Rain over time can do a lot of damage. The excessive heat can as well.

I'd also like to add that not keeping an eye on your foundation can mean big issues as well down here.

Last edited by JDuc; 02-04-2008 at 08:25 AM.
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Old 02-03-2008, 09:52 PM   #14
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Buying Foreclosure property


After seeing some of the responses I wanted to share the experience that my wife and I have had in buying a foreclosed home. We purchased a 50+ year old house a year and a half ago the week we returned from our honeymoon. We have pretty much been working on the house since then. We are young with no kids so not everyone could make the sacrifices we have made since buying this house to get where we are today.

We closed on the house knowing we had a lot of work to do. Right away we had a new heat pump installed. We also did a lot of prep work pulling nails, staples, tack strips, lenolium floor etc so that our hardwood floors could be sanded and refinished. Few hold ups with heat pump and floors caused us to have to stay with a friend for a week while the floors were finished up, no big deal to us but could be a major problem for some people. After that we spent 2-3 weeks removing wallpaper, spackling, sanding, caulking, painting so that we could get our main living areas painted and move some furniture in. During this time we were basically eating fast food and take out until I reinstalled the kitchen cabinets re plumbed the sink, new dishwasher, and range, and new kitchen lighting. Once that was done, then we cut the floor out of the laundry room to the joist, replaced 2 joist and some blocking by the walls and new sub floor. Then we tiled the floor (this was phase one of the laundry room as I just finished gutting to the walls and completely redoing). We also repainted and did phase 1 in the bathroom. I am now close to finishing the complete remodel in there. Some areas we made livable/tolerable to the wife for the time being. Now as we have saved some more money and gotten some more time we have done projects. I also have a 3 car garage that all 3 doors needed replaced. I replaced 2 doors and added openers, third door isnt used daily but will be replaced soon. We also have an in-ground pool that need a completely new liner. We hired someone to replace it, and also changed over from a chlorine system to a salt system(any questions about this type of system I'm glad to answer easily one of the best decisions we have ever made). I also spent a 3 day weekend pressure washing, staining a fence, and cleaning gutters. Another 3 day weekend was spent building new flower beds, doing some work to be sure the grade in the yard kept water away from the house. We have a full basement so water can be a problem. I have also changed my mantle, wired for speakers, lights, and a few other things in our living room. We hung blinds in every window. I'm sure there are many things I have not even mentioned yet. Some of the items I feel are no different than anyone else that buys/lives in a home. During this time I have also helped a friend remodel a laundry room, and bathroom and another one build a 800sq ft deck so this house hasn't been our life we go to 6-8 college football games and I spend a good bit of time hunting.

We are not done. I'm close on the bathroom right now, I am putting a spray coating on my pool deck so it is cooler in the summer, a nicer fence, another garage door, and a few other little things. But I'm still going to spend another summer with frosty beverages relaxing at my pool. In this whole process I have paid for someone else to do work for 3 things, new heat pump, floors sanded and refinished, and new pool liner. I have been lucky that my dad is handy (Wonder where I got it from) and my parents have been able to come and help a lot. My dad and I really enjoy getting to accomplish a lot of projects together. I also have a few friends that have helped out some as well. Not sure many wifes would put up with what mine has let alone put in the effort mine has. Buying a foreclosed home is not for everyone, but can be a very rewarding experience. Not just on the money side either but also the joy, pride, and time spent doing the projects. Once I finish my bathroom and get the house cleaned back up I will take a few more pictures. I will be posting some pictures soon with both before and after on this site. I will be willing to answer any questions.
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