foreclosure acquisition questions - please help :D
I'm getting ready to jump into the foreclosure market. I've got a couple questions before taking the plunge. I've gone to a few to see how they work, so I'm comfortable there, and I've spoken with my attorney regarding the costs associated with doing this.
So, let us say that Mr. Homeowner is underwater on his home, and for whatever reason it makes it to foreclosure. Mr. Homeowner paid 43K for his home in 1995. The judgment is for 92K. I've driven by it and here is how it stacks up:
Good:
GREAT location
Double lot
up-and-coming area
hot area for MLS listings
Large Home 2050 sq ft.
Off Street parking
Bad:
There is plywood in a couple windows
Have not seen inside
Comps: a 800 sq ft home sold on the same street, a few houses away for 80K, just last week.
I would say, that in good shape this would sell on the MLS for 130 - 140k
As it is, I'm not sure this is the BEST deal NOW (foreclosure wise anyway). That said, I'm wondering if this is still a good deal for buy / hold / rent because
1. Possibility of adding a second structure to the lot.
2. Long term appreciation (very up and coming area, lots of new development etc).
3. Same neighborhood as my other rentals, creating a coherent property portfolio.
Would you say this property is over priced?
What will happen if it goes to foreclosure and there isn't enough meat (ie no bidders). Is it then REO and the bank will list on the MLS? Will they start it higher than the judgment? I'm basically trying to decide if I should get it at auction, or wait and see if I can get it cheaper as REO (if that is what happens) - my concern is with the RE area being hot right now, I may run into more opposition as a REO than as a foreclosure...
Any suggestions would be MOST appreciated!
Thanks much!!
Mark
