We've taken the plunge and put in an offer on an investment property in our neighborhood. The house was foreclosed on in July 2011, and the previous owners finally moved out in October. We've been eyeing the house during that time period to see how much we could score it for and were surprised at the listing price of 99K.
A few things we have learned so far:
1. Cash is best. Otherwise do the bank and RE agent a favor and get pre-approved. You could also search for a cash investor, which is what we did (more on that later).
2. Short Sales, Foreclosures, and REO's are totally different. Some closings are fast, others are really slow. Sometimes you can wait months for a response on a short sale offer. Go in knowing what to expect.
4. Foreclosures are usually auctioned off at a court house, and you can find out info on available properties online. They sell to the highest bidder, which might present a problem if several people really want that property.
5. REO (Real Estate Owned) homes seemed to be the best option for us, and also the lowest offered price. They are already foreclosed upon, have a clean title, and in our case the bank was the highest bidder at foreclosure. So the house we have a contract on right now was owned by the buyers since 2006, went into foreclosure for failure of payment in July 2011, the house was auctioned at the court house in July and the bank was the highest bidder, and then the bank hired an RE agent to sell the property "as is". Since we had been watching this property closely (using information and tools on the Internet) we were able to keep track of it's status. Plus, it's in our neighborhood, which is really helpful. Buying an investment property can be risky, but luckily A (the husband) is excellent at fixing things and is always eager for a new project.
6. Buy something that is newer on the foreclosed/REO market. The longer the house is sitting vacant the more rehab it will need. This tip is good if you are buying your first investment property, working regular jobs, have a toddler, and are expecting a baby in December. Just saying.
We'll be back later with more info on the progress of our offer, and maybe a picture of the house!
-H.
P.S. Just thought we should also mention that we know nothing about the situation we have gotten ourselves into. We are in no way experts or people you should take advice from! Call your mom for that!
A few things we have learned so far:
1. Cash is best. Otherwise do the bank and RE agent a favor and get pre-approved. You could also search for a cash investor, which is what we did (more on that later).
2. Short Sales, Foreclosures, and REO's are totally different. Some closings are fast, others are really slow. Sometimes you can wait months for a response on a short sale offer. Go in knowing what to expect.
4. Foreclosures are usually auctioned off at a court house, and you can find out info on available properties online. They sell to the highest bidder, which might present a problem if several people really want that property.
5. REO (Real Estate Owned) homes seemed to be the best option for us, and also the lowest offered price. They are already foreclosed upon, have a clean title, and in our case the bank was the highest bidder at foreclosure. So the house we have a contract on right now was owned by the buyers since 2006, went into foreclosure for failure of payment in July 2011, the house was auctioned at the court house in July and the bank was the highest bidder, and then the bank hired an RE agent to sell the property "as is". Since we had been watching this property closely (using information and tools on the Internet) we were able to keep track of it's status. Plus, it's in our neighborhood, which is really helpful. Buying an investment property can be risky, but luckily A (the husband) is excellent at fixing things and is always eager for a new project.
6. Buy something that is newer on the foreclosed/REO market. The longer the house is sitting vacant the more rehab it will need. This tip is good if you are buying your first investment property, working regular jobs, have a toddler, and are expecting a baby in December. Just saying.
We'll be back later with more info on the progress of our offer, and maybe a picture of the house!
-H.
P.S. Just thought we should also mention that we know nothing about the situation we have gotten ourselves into. We are in no way experts or people you should take advice from! Call your mom for that!
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