Wow...there are some real deals and some real busts in the foreclosure market. I have viewed about 10-15 foreclosures in the last 3 weeks and every one of them was interesting and had its' own story. Most of the story is told by the black mold, torn wallpaper, busted windows, broken cabinets and missing AC units. One was even covered with what could only be explained as bullet holes. Okay, I must say, none of these homes were listed for more than $100,000 so you can begin to imagine the setting.
There were a few properties that had great potential. With a little cosmetic work and several weekends of hard work and sweat, one could probably make a good investment by buying these properties. Always check the foundation for cracks. If your investor is going to finance the property, the home cannot have black mold or bad stuctural damage.
Finding just the right home to buy, fix up and hopefully even flip is the challenge.
Brandon:
You learn the things you want to deal with and the things you want to avoid! In NW Tennessee, I have sold a half dozen REO's at $15,000 or so. All of them would need gutting out and starting from the 2x4's out!! Not exactly my expertise.
But I will jump in when I know that cleaning out the flower beds and repainting the interior will bring a buyer!!
Investors love stuff like this, especially if the ARV"s are great. You can always find contractors that will do the work. So, if you dont have investors I would suggest you find some and get them down there....
BULK FORECLOSURE DEALS
THE OPPORTUNITY: With the onset of the recent credit crisis, homes by the thousands have been going into foreclosure in the last couple of years in numbers never before seen. While it has always been common practice for savvy investors to purchase foreclosed properties at discounted prices, it has never before seen the magnitude of the savings that exist today by purchase these homes.
Many of the areas that have been hit the worst by the economic downturn, such as Michigan, Ohio, and Missouri present some of the best opportunities for long term profit. Investors may purchase property for discounted prices and then learn how to cash flow their properties in a short amount of time. The investors that are truly profiting from this opportunity are not afraid to invest in these areas.
The company offers investors the opportunity to select the properties that they wish to invest in, and then the company may at the option of the investors assist in the management, marketing, and sale of the purchased properties. The company allows for a traditional closing if that is the request of the investor.
PROCESS: The first step in the investment process is for the investors to select the properties from the available inventory. They choose from either vacant properties, or occupied properties that are already cash flowing. Vacant properties range in price from $8,000 to $12,000 depending on the number of properties purchased. Occupied properties are priced individually, but generally range between $20,000 and $30,000. Properties come with warranty deeds and title policies in most cases.
Once the desired properties have been selected, the company verifies that the desired properties are in fact available for closing as there are several investors and other clients that purchase from the inventories, it is possible that a property may already be taken while other investors select. Therefore, it is in the investor's best interest to shorten any due diligence required or place the full amount of purchase funds in escrow to hold the properties.
The next step in the process is to determine the method of closing. As explained, a normal closing is available, but any closing costs, title work, etc, will be charged separately to the investor. Most clients decide to forego a traditional close to save the expense and the time required. A quick purchase transaction is then carried out through an attorney escrow.
For a quicker closing, all clients place the necessary funds for the full purchase in the escrow account indicated on the purchase contract. Upon receipt of the funds, the contract is completed and the funds are disbursed. The investor then receives the deeds to their properties as soon as they are available from the selling banks. This process can be as short as two to three business days, or can take up to 90 days. The purchase contract and notarized receipt of funds serves as verification of purchase until the property may properly be recorded.
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