I'm looking for examples of foreclosure purchases that went south. I'm thinking of doing my first ever, here in CA and wanted some examples of pitfalls to avoid.
I'm prepping for: Immovable tenants, multiple loans, title issues, structural problems, and funding difficulties, but I'll take any story you got.
I have a few. But realize that most sane people aren't going to post their nightmares on BP! The worst (best??) stories are courthouse (foreclosures, vs. REOs that most people call 'foreclosures') purchases that involve undiscovered property impairments along with legal issues. One booby-trapped property rigged to explode... squatters... massive sewage backups... when BP has a "failure stories" category maybe you'll get what you are looking for.
@Jared Bockoff the standards are
1. house stripped before you got possession
2. you bought a second... thinking it was a first.. frankly in this day and age if you did that you have more money than brains
3. In our state senior tax deferral you usually don't learn about that until you get a property that had one.. only way to check to see if there is deferral is with a phone call to the county tax collector... ( that happened to me to the tune of 90K) its a one time lesson although I will say I salvaged what I thought was going to be a 150k profit deal and it was only 60kk could not figure out why no one bid on it LOL
4. get caught up in the bidding process and pay way to much only to find that out when you sell it and make no money
5. not bidding on a great deal because of an IRS LIEN they rarely redeem I got some of my best deals that had those on them.
most other phycial problems like soil foundation etc one should be able to see
6. rural property... septic or well is bad and can't be fixed house can't be sold
The greatest barrier though is in CA and many other hot markets your up againts companies that have 8 figures or better and your competing againts them.
Or you have some one who wants to buy the home to live in it.. rarely will you beat them.
So there is a ton of leg work with little reward if you don't have a wide open net to what you want to buy