Updated 2 months ago on . Most recent reply
Foreclosured auction, opportunity or mistake?
There is an auction for a 2 bed 1 bath house (under 1000 square ft) building in 1985 in a very nice and popular area. The starting bid is around $6000. Comps in the area are showing $200k as a conservative sale price. There are many selling for more than that. I am not concerned about dealing with the previous owner, as I am an experienced property manger and have no issue with dealing with an eviction case. The question is the rehab... I am not able to see the interior of the house until after winning the bid and getting the owner out. Therefore there I will not be able to build a scope of work and get accurate pricing under after I own the unit. Is this a silly deal to consider? In my mind, its not a very old house and there for my not need a ton in the "bones". Even if we assume $100000 rehab as worst case scenario, if I were to win it at $50,000 we would still be at the 70% number. The question is taking the risk on the rehab and hoping for a higher sale price than the lowest comp.