Thank you in advance to anyone who takes the time to read this and give advice. As a disclaimer, I am not an investor and am definitely a novice in this area! The little amount of research I've done has led me here - it seems like there are many people on this site that are willing to help.
My husband and I purchased our (1800 sq ft) home five years ago, and when we moved in we did not realize that the house next door had been vacant for the past year. Fast forward to now, and our neighbor's house is STILL vacant! The previous owners were foreclosed upon, and according to Zillow, the house was finally sold in February 2013 for an undisclosed amount. The house was listed for sale on auction.com for $95k in February 2014, but the listing was removed a week later. The house is 2700 square feet, and would easily sell for $250k in good condition in our (very hot) market. The only maintenance that we've noticed being done on the house is yard upkeep.
We have been extremely annoyed by the vacant house for years, but now we are wondering if this is an investment opportunity right under our noses. As an added bonus, we would love to speed up the process of getting someone (possibly us) into that house, as it is not helping the property values of the surrounding homes. We have always planned on renting (rather than selling) our current home whenever we do decide to upgrade. Could this be an opportunity to upgrade and make a great investment at the same time? Or are we crazy for even considering it?
Long story short, we are considering purchasing and living in our next-door neighbor's home, which has been vacant for 6+ years and is currently owned by a bank. We would then own 2 homes next to each other, and we could rent out one and live in the other.
I would take any advice at this point, and these are the questions I have right now.
- The taxes are being paid by Bank of America. Do we attempt to contact BoA directly to get more info?
- Is it worth contacting a broker at this point to get approved for the new mortgage?
- Is there any point to contacting a local realtor to help us?
- If the house is re-listed on auction.com, any idea what it would be likely to sell for?
- If the house is re-listed on auction.com, do you really have to make a cash only offer? Is that the only way to purchase this type of property? (We don't have $100k in cash, but could afford a much higher mortgage than what we are currently paying).
Again, thank you for any help you can provide!
Contact the Bank REO department and see what their intentions might be. Get your ducks in a row and prepare an offer. You need to understand
- what is the current equity held by the bank
- how long they have held it (the longer the worse it is and YOU are going to solve THEIR problem). Whatever the equity is, the REO status is ruining their ability to loan new money.
- what the FMV is for this house.
I would make an offer ~= there equity, have them pay all costs, get you a clear title and title insurance. The difference between your offer and the FMV is your instant gain.
Sadly this happens a lot. banks sit on properties due to their own bureaucracy a legal red tape. Large banks like Bank Of America are not likely to even talk to you about the property. The standard answer is wait for it to be listed.
That said it is always worth a shot.
Odds are there is some sort of title issue. Go through the motions though since its next door. That 95k list price was garbage to get people motivated in bidding.