Investor · Bordentown, NJ · Member since 2015 · 16 posts · 6 votes
There is an abandoned REO across the street from where I live and managed to get the full story from a city commissioner. He informed me that BOA foreclosed on it almost 10 years ago and has never tried selling it. The power is still on and the bank sends someone over to cut the lawn; likely to avoid city fines. The comissioner wants it fixed up and occupied so the city doesn't spend years trying to get it back through condemnation.
Is there anyway to get the bank to discuss selling it?
There are a lot of those properties around. If it's not listed, it's not for sale. That can happen for a variety of reasons. Some of those properties are known as "zombie foreclosures" because they are in limbo. The bank foreclosed, so the homeowners had to move out, but the bank can't sell the house because they can't prove they own it due to faulty paperwork from all that robo-signing that went on during the "anything goes" days.
That property you saw might have been sitting vacant for years and it might sit vacant for years to come. Once the bank has all the paperwork in order and they can sell the property, it will get listed on MLS or go on an auction website or both. There's some sort of regulatory requirement that the property be widely advertised, so they couldn't just sell it to you. If you could just reach out to the bank and buy an unlisted REO like that, the house you saw would have been snapped up by someone already. Trying to figure out how to buy that vacant REO goldmine is something a lot of new investors do. People ask that question all the time. I did it, too, and then somebody explained to me what the deal was.
Perhaps someone else can offer some more or different insight, but that's the deal with those long-vacant REOs as far as I know.
There are a lot of those properties around. If it's not listed, it's not for sale. That can happen for a variety of reasons. Some of those properties are known as "zombie foreclosures" because they are in limbo. The bank foreclosed, so the homeowners had to move out, but the bank can't sell the house because they can't prove they own it due to faulty paperwork from all that robo-signing that went on during the "anything goes" days.
That property you saw might have been sitting vacant for years and it might sit vacant for years to come. Once the bank has all the paperwork in order and they can sell the property, it will get listed on MLS or go on an auction website or both. There's some sort of regulatory requirement that the property be widely advertised, so they couldn't just sell it to you. If you could just reach out to the bank and buy an unlisted REO like that, the house you saw would have been snapped up by someone already. Trying to figure out how to buy that vacant REO goldmine is something a lot of new investors do. People ask that question all the time. I did it, too, and then somebody explained to me what the deal was.
Perhaps someone else can offer some more or different insight, but that's the deal with those long-vacant REOs as far as I know.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
10y
We could do them a favor, we renovate the house, mow their lawn, pay their utilities, then we rent for free. What a nice deal for someone paying rent 2k/month.
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
10y
@Manolo D., sure, a clever Bank Manager may agree to let you do that - but then evict you the moment it's condition is improved enough for them to get the proper market value that they are obliged to look for. Good luck!
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
10y
Brent Coombs If conditions improve, they don't have to evict, simply move to the next problematic foreclosure, just rinse and repeat. 5-10 years is worth the repair. 24k/year worth of rent just throwing away. Ha!
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
10y
@Manolo D., my point was, Banks are not in the business of being Landlords. It would be the next Buyer who would decide (and of course, demand market rent)!