foreclosures - Contractor Talk - Professional Construction and Remodeling Forum

Staging · 02-10-2009, 02:39 PM

Any of you guys buying foreclosures and fixing them to be put back in the market? I ran into a old friend of mine and he started doing this. He has bought 2 houses for under 40k each and invested about 20k into each house. He sold the houses for around 100k each. I saw the houses and they looked great. He is working on his third house now. It seems like a good idea. In florida it is very hard to find a house at 100k that does not look like a shed. The houses he sold are 3 bed and 2 bath 2 car garage with about 1800 square feet. I just want to see if anyone is doing this or has thought about it?

IHI · 02-10-2009, 02:44 PM

We dont have much forclosure around here, but we do have alot of flood damaged homes and with the amount of tear out and redo needed, $20K even in our modest market is'nt going to get very far

Staging · 02-10-2009, 02:55 PM

I hear you on that. The 20k that my friend used was spent mostly on cosmetics and upgrades. As slow as things are he is doing most of the work himself, so he saves money on some labor.

rbsremodeling · 02-10-2009, 03:00 PM

A fixer upper round here will cost you 300-400k

even in this economy.

bob_cntrctr · 02-10-2009, 03:31 PM

I've been knocking the idea around in my head. Usually I buy, renovate, and keep to rent, then let time increase the value and tenants decrease the mortgage. But a well-priced foreclosure with the potential for some quick turn around profit might be a nice change from managing tenants.

Question - other than the paid online foreclosure listing services, where does one find such things?

BKFranks · 02-10-2009, 03:37 PM

Most people around here I don't think have enough work or money to afford to buy a foreclosure to fix it up. Unemployment has doubled in two years.
My nephew just bought a house in a new community. Every third house is a foreclosure. They're all just sitting there because no one can get a loan.

SelfContract · 02-10-2009, 03:45 PM

Location.. location.. & locations gents.

The problem is... if we can find a cheap fixer, it will be difficult to sell later. And if we find good house/location to sell, then that fixer is too expensive (many want same) to invest $$ in.

It's still a gamble 50/50 opportunity in this economy. Luck, courage, & gut instincts are all required. Good luck!

Staging · 02-10-2009, 05:12 PM

self contract has a point. First let me just say that these house that are foreclosure are not anything special but are a nice homes. It takes balls to do a investment like this. Either you sell it quick or you going to have to rent it for cheap. The location of the home is the most important and then the condition. You do not want to spend to much money fixing the house. I am looking around maybe I will try it. Also a house that looks really good, has equity and is around 100k is great selling point during these times. Maybe first time buyers will want something like that.

ribuilder · 02-10-2009, 05:37 PM

I'm in RI and there are ALOT of forclosures in Providence. I'm not the one buying them, an investment compnay is. I'm just the GC on them. Some of the houses are 3 family tenamants and some are sinlge family. I think they grabbed the last one for about $30k. Definatly a good investment if you have the DOE to invest. Grab for $30k, put $15k-$20 into...sell for $100k. Not bad for about a months work.

Staging · 02-10-2009, 05:41 PM

I want to do it but I am going to do my homework first and see what areas are the most forclosures.

Gary H · 02-10-2009, 05:54 PM

Come to my area of Michigan. You can buy houses all day long for $10,000 or less. Got cash? 5 day closing. The only problem is you can't sell anything here. No jobs =no money.

JSC · 02-10-2009, 06:32 PM

I've been making offers on bank owned homes around here. Have been sticking with well located areas, and all of them have been going for well above the listing price. The last one listed for $209900, we made an offer of 221K and didn't get it . Getting tired of their game.

D.A.S.Anthony · 02-10-2009, 07:17 PM

Quote:

Originally Posted by rbsremodeling

A fixer upper round here will cost you 300-400k

even in this economy.

I am with you RBS, a open lot here will run you 500k, and that is down from 750k a couple years ago. We just do not have the capitol although buying that 500k looks like a steal compared to the 1+ mil we paid 3 years ago. If we could get a bank loan we would do it, but everyone knows how much the banks are tossing loans to everyone right now.

XanadooLTD · 02-10-2009, 07:22 PM

We flipped about 10 a couple of years ago. Back then you could get houses for 30K, put 20K into it and sell for 110-120K. You can still buy for 30K here and try to flip but the buyers out there can not get financing. It is a dying business. If you only need to make 10-20K you will do fine though. A lot of waiting and showing., Good luck

Bone Saw · 02-10-2009, 08:24 PM

not to mention reit's, banks and realtors will be 10 steps ahead in bidding on worthy properties every step of the way, op make sure you do your homework, and have inspectors and title companys in your pocket

SWAY79 · 02-10-2009, 10:47 PM

Quote:

Originally Posted by bob_cntrctr

I've been knocking the idea around in my head. Usually I buy, renovate, and keep to rent, then let time increase the value and tenants decrease the mortgage. But a well-priced foreclosure with the potential for some quick turn around profit might be a nice change from managing tenants.

Question - other than the paid online foreclosure listing services, where does one find such things?

Check your news paper under the "Announcments/Public notice" section, I also work directly with several loan officers & realestate agents/brokers, they will always know about the forclosure/"pre-forclosure" long before it is made public info. (This way you get the opportunity to make the investment before it hits the forclosure listings & the other investors "attack") I invest in N.C. & S.C., there is an abundancy of good investment propreties available there, finding them, making your investment & polishing the property up is the easy part, getting someone to buy it on the other hand can be frustrating. I utilize several very affective stratigies to sell these proerties, I can help/teach you if you are interested. Just PM me

Mike Finley · 02-10-2009, 10:53 PM

Quote:

Originally Posted by Staging

Any of you guys buying foreclosures and fixing them to be put back in the market? I ran into a old friend of mine and he started doing this. He has bought 2 houses for under 40k each and invested about 20k into each house. He sold the houses for around 100k each. I saw the houses and they looked great. He is working on his third house now. It seems like a good idea. In florida it is very hard to find a house at 100k that does not look like a shed. The houses he sold are 3 bed and 2 bath 2 car garage with about 1800 square feet. I just want to see if anyone is doing this or has thought about it?

If the conditions existed here for what you friend is doing I would do that full time and forget everything else. Your friend is as described is getting 65% return on investment.

Sign me up. Unfortunately those conditions don't exist here. You'd be lucky with a 5%-10% return.

detroitMi · 02-11-2009, 12:04 AM

Lots of ppl out there do that .I've got some customers ,they're buying and flipping Forclosed houses ,the last one I've done for them was a 3 bedrooms 2.5 baths,etc.They bought it for 60 000 fixed it and sold it with 169 000,it was sold in a couple of weeks .If you have the opportunity to do that ,go for it

Bodger · 02-11-2009, 03:29 AM

Financing is the stumbling block out here it seems. I don't see much flipping going on anymore.

A lot of people I talk to are worried that this economy is going to get catastrophically worse before any hint of an upturn.

But, in my neighborhood there is a house being gutted and remodeled, new project and just started. So someone has some dough.

ArmstrCarpentry · 02-11-2009, 09:31 AM

The thing that worries me about foreclosures is the "quit claim deed", even with a title search and title insurance most banks wont touch a property without a warranty deed - would you be willing to take on the liability and resell the property with a warranty deed? Not being 100% sure there are not 5 mortgages out on the property or property tax or even income tax liens in progress or some other unknown that bites - it seems like a good way to get burned...