Newbie and question on REO's

[Frank Ruopoli]

Hello my name is Frank. I am as new to this as it gets. This is my very first post. I have a family of four and am a sole provider working full time. Wanting something better I read rich dad,poor dad like over night and am now digging in to set for life. With that being said I am eager to learn about possibly flipping houses but more about BRRRR. Now to the question... I see a lot of properties in my area that are foreclosed and going to auction. In the description a few state REO-occupied. I am not familiar with the auction process and am curious if these properties pose more possible issues and what I need to be aware of. The area I am looking in is in central NJ. Also I have just been browsing zillow and realtor.com. Are these sites a good start to gain info or am I most likely wasting my time. Like I said I am completely new to this. Sorry for the long winded post. Thanks in advance for any info or advice.

[Lauren C.]

Hi @Frank Ruopoli!

I echo Mindy's advice on teaming up with an agent but I can shed a little bit more light on foreclosures in general. I am currently under contract on a HUD foreclosure in South Jersey and it's been a bit of a bumpy ride.

We bid for it via HUD's auction online but we were able to tour the property before. I believe this is the case with all HUD homes and a big plus.

The property is currently vacant which has made the process slightly easier as we are able to have inspectors, appraisers, etc. visit the home without giving the current homeowner/tenant any notice. I don't have experience closing on a property with occupants but I can imagine if would make the process rather difficult. 

Mindy mentioned the activation of utilities. This has been the root of our problems during the closing process. The property is a duplex, and one of the units had been unoccupied for over a year, so we had to go through a 3 week process with the township and the utility company to have the utilities temporarily turned on. Between pulling permits and paying a plumber to preform an air test, we've spent almost $2,000 on a property we don't even own yet. Definitely a cost I was NOT prepared for. Fortunately, the property is a good enough deal that it doesn't affect our decision to move forward.

I've been writing about this entire process on the blog, rentalstowealth.com

I hope this help, please let me know if you have any questions and good luck!