My wife and I are looking at investment properties in Nashville and the middle Tennessee area. We have come across some bank owned properties that are being foreclosed in the classifieds of newspapers - most of which can be found through auction.com or hubzu.com. Has anyone had any experience with either of these sites? Or auctions on the courthouse steps? My gut tells me that the deals are made with lenders before these properties hit the courthouse steps, but I may just be cynical.
The problem with bank owned properties in nashville specific is almost of all them are at FMV. Banks have stopped short selling for the most part as well. If you go to those auctions, most of them get bid up too high, and the margins are too slim. Same thing with REO's on the MLS. Those are also overpriced, and they are still being bought pretty close to ask and sometimes above ask. My advice is to let the REOs go and find a different way to find deals
Although I do not have experience with auctions, I think they may be worth looking into in some parts of Nashville. The property next to mine was auctioned on the courthouse steps and went without a bid back to Fannie Mae for $60k. It sold as-is through homepath a few months later for almost $36k more.
I have been watching the on-line Auction.com properties for a while. Most of them don't meet the reserve and end up back for another round of auctions. I have not bid on any so I can't speak to their process beyond what I see on-line. One exception was a townhouse in the Nashboro Village area that I would have put the FMV at about $115-120k. It did end up meeting the reserve and has not resurfaced on their site. The winning bid appeared to be about $95k, so not a great deal, considering it was occupied, by the current owner who was forclosed on (and it is specifically your problem to deal with them after you purchase IF they don't move out), and there were no interior pics, no inspection report, and you weren't allowed to see inside before you purchase it. I would have needed a bigger discount to the market value in order to buy that. All that being said, I have considered going to an auction just to observe and see what happens, and I may just do that. Nashville is just tough to find deals right now. You just have to look everywhere and you will uncover a few!
In reference to that property being sold back to Fannie Mae, most banks will outbid you to protect their investment. and just because a property was sold for 35k doesn't mean it's a "deal." that property could be in a D class neighborhood with high turnover as rental, or it could be worth 50k fixed up so there's not equity after fixing it. Make sure to do your homework on the comps and the area
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