Looking to buy into a foreclosed home in my neighborhood

7 Replies

I’m kind of new to this whole brrr thing when it comes to real estate investment and I would really love some advice on a potential investment I’m seeing. I’m on the bigger pockets foreclosure website and I’m seeing a property massively undervalued for its square footage and what homes surrounding it are going for. The asking price is 143900. The minimum price of a home I’ve found on Zillow in the same neighborhood is 16990 and the median price of homes of the same style in the same neighborhood is 225000. I live close enough where I could theoretically be a land lord however I could hire a property manager if the numbers work out. The neighborhood is mostly populated by middle class and military families that work on base or at the local saw mill and it is only 12 minutes away from base allowing me to potentially tap into the military commuters community. I have a great credit score and I am willing to do some of the minor contracting work (painting, retiling and landscaping) by myself as I don’t have a family and I am currently house hacking with other lieutenants and I’m essentially only paying 300 dollars or so to live in my house every month while still paying equity on my mortgage. Does this seem like something I could get some financing for as I could see myself getting at least 1200 in rent from a tenant after renovations. It would be my first true investment property and I just want some advice before I actually seriously considered it.

You need to actually look at the property and it’s condition. And is it actually for sale at that price it in an auction site.....many of these services are inaccurate.

$1,200 rent from a property worth $170-225k+ does not make a great rental.

It sounds like this may be a better flip opportunity assuming there is that much equity potential.

Kyle,

One thing to keep in mind when running the numbers is vacancy and repairs. I do minor repairs and clean ups for property managers in my area and the bill can add up fast. For example a tenant moves in and your doing great cash flowing $300 a month for the year lease making a total of $3600. Sounds great right just a couple things happened. He let the grass grow to high, his dogs chewed the baseboards and dug in the yard, He put a whole in the garage drywall with a barbell, and the fence is busted in multiple places. That is an easy $1200 leaving $2400. Now the house sits for three months and now Im covering the mortgage (at 143,000 for a VA mortgage your propably sitting $800 with taxes) which equates to $2400 leaving me with zero profit. Now yes you get appreciation (hopefully) however those repairs and times on market are average and don't include big items that have a life span like roofs and hvac. Sorry for the long response but the point is it doesn't take much to put you in a losing situation.

Respectfully,

Zack Dunn

Dunn Property Acquisitions & Renovations

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