I'm a newbie and this would be my first project outside of my personal house. Looking to flip this first if it doesn't sell id be willing to refi and hold as a rental.
House Location: UT (Im in california) I just took a trip to meet up with the realtor team I've been dealing with.
This house is a foreclosure (someone started to flip this and it foreclosed) All big ticket items are new.
Asking price $92,500 (I'd be offering $85,000 to start)
To finish the rehab: $10,000
Comps for the area are $120,000
Realtor is pretty confident He could sell for $130,000
I have enough equity in my current house to do the deal alone, just looking for other options, offers to do this without pulling money out of my house.
Thank you for everyones input ahead of time!
Most on here would figure 70% ARV . If you can get the property for 74k and stick 10 into it your doing good. ( I went off of the 120k ARV , since that is what the comps are). If you get 130 for it then thats even better. You just want to be careful and not overprice it and scare a potential buyer away.
Figure exit is $120,000 and rehab is $20,000 - not worth the effort :)
Let me see. "This house is a foreclosure (someone started to flip this and it foreclosed) All big ticket items are new..." combined with "I'm a newbie and this would be my first project..."
And the topic is "Deal? If so I need help funding or options please!"
I see way too many red flags. At least 3. That's a no-go.
Another red flag: "House Location: UT (Im in california)"
Another red flag: "Asking price..." I thought this house was a foreclosure? That means the trustee is in control, not an agent. At best, you don't know terminology and for foreclosure investors this is a red flag.
Someone posted recently about "risk". This kind of "deal" is the definition of "risk".
I am from San Diego. Since this is not going to be your primary residence the rates will be base on Non Owner occupied residence . Need to ask a mortgage brokers what that number will be if you choose to go that route. Let me know I have one handy. Pick a property near your location. Do NOT be an Absentee owner of another state. My brother in law is a electrical contractor who bought a property in Florida. He took a loss on that property. Stay around your area.
I use to sit on HUD sub committee for foreclosure. Just wanted to share the process.
The foreclosure sale usually takes place at one of three possible sites:
1. The courthouse steps;
2. The trustee’s office;
3. The property (homeowner’s home).
The auction must take place, according to state law, on a regular business day. At the scheduled time, the home is sold to the highest bidder.
If a homeowner has already been notified of a sale date for their home, it is still possible for you, the LMP, to assist the homeowner in saving the home either by working with the lender, the trustee, or through some alternative method. Your level of success is based entirely on your willingness to take the necessary steps in order to help your client save the home from foreclosure.
Once a home is sold at auction, any proceeds from the sale are used to pay off the balance on the mortgage loan, including past due payments, late fees, attorney’s fees, etc. If the home does not sell for a high enough price at auction, then the mortgage lender may have the right to pursue a deficiency judgment against the homeowner for the repayment of any remaining balance.
However, not all states, allow this action. Check local foreclosure laws for specifics on deficiency judgments in the state(s) in which you are working.
RIGHT OF REDEMPTION
The Right of Redemption (same as “redemption right”) is defined as: The right granted in some states for a mortgagor (trustor, homeowner) to redeem ownership of real property, within a specified amount of time, after a foreclosure sale and upon payment of the amount of debt plus, interest, unpaid taxes and all costs incurred (arrearages, etc).
The redemption period (length of time) varies depending on the foreclosure laws in the homeowner’s state. Some states have no statutes allowing for mortgage redemption after the sale, which means, as far as they are concerned, the foreclosure sale is final.
|Alaska||Trust Deed||Non-Judicial||Notice of Default||3||None||Allowed|
|Arizona||Trust Deed||Non-Judicial||Notice of Sale||3||None||Allowed|
|California||Trust Deed||Non-Judicial||Notice of Default||4||None||Prohibited|
|Colorado||Trust Deed||Non-Judicial||Notice of Default||2||75 Days||Allowed|
|District of Columbia||Trust Deed||Non-Judicial||Notice of Default||2||None||Allowed|
|Idaho||Trust Deed||Non-Judicial||Notice of Default||5||None||Allowed|
|Nevada||Trust Deed||Non-Judicial||Notice of Default||4||None||Allowed|
|New Hampshire||Mortgage||Non-Judicial||Notice of Sale||2||None||Allowed|
|New Jersey||Mortgage||Judicial||Complaint||3||10 Days||Allowed|
|North Carolina||Trust Deed||Non-Judicial||Notice Hearing||2||None||Allowed|
|North Dakota||Mortgage||Judicial||Complaint||3||60 days||Prohibited|
|Oregon||Trust Deed||Non-Judicial||Notice of Default||5||None||Allowed|
|South Dakota||Mortgage||Judicial||Complaint||3||180 days||Allowed|
|Utah||Trust Deed||Non-Judicial||Notice of Default||4||None||Allowed|
|Washington||Trust Deed||Non-Judicial||Notice of Default||4||None||Allowed|
|West Virginia||Trust Deed||Non-Judicial||Publication||2||None||Prohibited|
Reasons why people lose their home
A loss of an income, death in the family, medical expenses and other life-altering occurrences can happen to anyone, causing us to fall behind in our loan payments. If we neglect paying our credit cards it hurts our credit rating, but if we stop paying our home loan the situation is even worse, because the lender can foreclose, taking ownership the home. For most families, a home is not only a significant financial investment but also a source of pride. The loss of a home, due to unexpected events which leads to financial problems are most often associated with the following life changes:
*Death of a family member
*Loss of job
*Cuts in work hours or overtime
*Divorce or separation
Can be financially and personally devastating which can lead to emotion distress and crisis.
@Chris Martin Sorry if my terminology is incorrect, but I did find this house on willow of all places. Has an mls listing #
@Ben Leybovich Please explain why the 20k for rehab? I've been in construction 13years grew up around it as well. I was already figuring very high for what it really needs to cover other costs. It seriously needs 2 toilets 2 bathroom sinks to complete the vanities already in, about 500sqft of carpet and some misc drywall patches and paint... I can do everything but the carpet.
@Aaron Junck My initial thought was to offer $75k, comps are 120K a similar house sold for 159K That matches this house 4bed 2bath, only difference is 100sqft. I like to stick to the comps though as we should for our spreadsheets.
Thank you all again this is helpful knowledge
OK - but what you described is not a rehab; it's a touch-up. In a rehab, $10k barely buys cosmetic and finishing. Plus, Murphy is alive and well :)
For me, this is a no deal, Josh.
@Ben Leybovich ok thank you I'm just trying to better understand each persons why so I know a future deal when it comes.
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