Investor · Layton, UT · Member since 2016 · 162 posts · 237 votes
I have a purchase agreement for a house in Hooper, Utah (Weber County). I have 2 days to move forward or pass on it. Here are a few of the details of the foreclosed property:
Purchase Price: $266K
ARV: $370-380K
Year built: 2007
Sq Footage: 3900
Estimated repairs: No idea
I won't have interior access because it is still occupied by the previous owner and I would need a hard money loan to complete this purchase.
Are there lenders that will loan to me even though I won't have interior access (and therefore pictures)? I am planning on wholesaling this house as soon as I close, but I'm not sure if hard money lenders would loan on this if I won't be rehabbing it.
@Caleb Rigby, so I have a couple of questions. First, are you buying this property from the bank? I am not really familiar with the Hooper market. What is the average days on the market for this price range of a house? The last question is I probably would not pursue the deal without seeing the inside of the property first. On that size of a house you may have to spend $60-$80K in rehab to put it in excellent condition and be worth $370k+. If that is the case your numbers don't work. In my opinion, if you have a really short time frame and can't get all the info you need I would want a much bigger spread on the property. If it were up to me I would pass on the deal or get more time so you can complete your due diligence.
It looks like the recourse is just to foreclose again (properly). I can see why title companies would be nervous about something like this, but it doesn't sound like an unsolvable defect.
No, not totally unsolvable, but if you weren't the foreclosing entity in the first place, and have bought the property subsequently from the foreclosing bank, and now can't evict, you also can't foreclose, because you didn't have the mortgage to start with. And what incentive does that bank have to re-foreclose? So it's bigger than you think.
Plus, in MA, foreclosures take a long time. A very long time, sometimes.
@Caleb Rigby Good luck, I was looking at the same property on Auction.com as a potential BRRR strategy. I live in that same neighborhood about a block away, let me know if their is anything you need help with.
@Mike Palmer, Long story but no, I passed on it. When I got inside the house, the previous owners were kind enough to essentially disassemble the entire kitchen before they left – they removed most of the upper cabinets, tore out the granite countertops, and removed the sink. The backyard was full of weeds and it didn’t look like grass had ever been planted back there. The basement was 100% unfinished, which while not bad, was different than I had been assuming in my modeling of the projected returns.
I shopped the deal around to 4-5 guys that buy a handful of properties in Weber/Davis Counties and no one wanted to bite at that price. I just checked and it is back on Auction.com. If I could have gotten it for $240k instead of $266k, then I could’ve done something with it.
Lesson learned: Assume the worst if you’re buying a house sight unseen. If it’s not as bad as you had planned, then you’ll have more profit then you were planning on. I’m grateful I’m not out any money to learn this important lesson.
Lesson learned: Assume the worst if you’re buying a house sight unseen. If it’s not as bad as you had planned, then you’ll have more profit then you were planning on. I’m grateful I’m not out any money to learn this important lesson.
@Caleb Rigby, I'm with @Jeff Rappaport on this. I did meet yesterday with a buyer who has been buying foreclosures for over 7 years and knows the process well. He also uses his own funds so he might be a good person to chat this over with or partner on. He's also a BP guy.