Foreclosures

Staging

Alot to think about and it seems like alot to risk also. That's in the business we are in dough. Still doing some research and talking to some loan officers and realtors to get more info.

Rx8

i just bought a $115,000 house for 31k, plan on spending 10k+/- , dont need to make a fortune on it, just fills in my empty time while work is slow, and payments on it are only 380 including all taxes, great time to fix up houses if thats what u like to do

trptman

Thats what Im doing currently. I'm finishing up a remodeling job for someone and then I'm heading to a house (bank owned foreclosure that I got at a real good price) I bought in december to fix back up and likely rent it out-add it to my other couple of rentals. Or sell it if the market picks up at all over the summer.

Blast&Coat

We have flipped about6-8 houes over the past couple years, usually netting 25-30k on each one. If we are going to sell we usually price low to get a quick sale> I rather get rid of it than hold it for 3 months and field 100 calls and 20 showings just to get another 5-10k.
We have learned though that the best thing to do unless you are going to make a huge profit is to rent it out for at least a year, this doesnt do much for the mortgage pay down but it helps you avoid the seriously hefty capital gains taxes! 15-30% easy, pendingon your tax bracket.
In this market this is what you do....

Buy the house cheap,
Option 1.) Fix it up just enough to make it rentable, than stick a tenant in it with enough rent to cover the monthly payments. When the market picks up enough or at least a year later to avoid capital gains than you kick the tenant out finish up doing the nice work (so the renters could not destroy it before hand) and then sell it. Result= Hopefully the market has picked back up or at least the bank has loosened its wallet for people to buy. You have avoided the ridiculous capital gains fees, you have a years worth of interest to write off (showing a loss so you will get mroe money back from taxes) The house is in new condition because you waited to put the nice repairs in after the tenants moved out. Then sell. This is my usual option.

Option 2.) Fix it up all the way right when you get it. Get a new appraisel on the house to reflect its new value. Then refinance it to get a much lower monthly payment. You then rent the house at a decently higher price than you mortgage payment, hence providing you with an extra monthly cash flow afte ryou have paid the mortgage. Then when the market picks back up and you have avoided capital gains you sell. If you are making good cash flow we always hold on to these properties.
Result: You have avoided capital gains, you have made $$ each month after paying the mortgage, the house should have been fairly easy to take care of if all the work was done up front. The only downfall to this is the risk that the renters being well "renters" have wore down the shine on the work you put into it a year ago and techincaly everything in the house is now not new anaymore. So some money may stil have to be spent to spruce it up to sell.

Here are som quick numbers on the last property we purchased almost a year ago.
Duplex
purchase price 85k
2k down payment, 7k fix up investment.
property reappraised for 128k.
Refinance (essentially 128k house, 83k mortgage = 45k down payment in refi terms)
New monthly payment amount $552.
Rent each month: $1325
Total in my pocket every month after mortgage = $773
Plus I have mortgage right offs plus write off the 7k invested to get it ready to rent.
Plus 45k of equity in a house to borrow against if I need it.
Ill probably hold onto this house for 5-8 years enought to make a small dent in the mortgage let the house value rise and raise the rents. Then sell for a nice profit.

Hope this helps someone feel free to contact me with any q's.

Five Star

i started going to auctions, but people start waiving like they see obama and end up paying more for a fixer upper than a move in condition on the same street

trptman

That's funny right there, I don't care who you are

Five Star

try the william and williams auction there free search of up comming aution all over the country is great

Five Star

these people watch those diy shows and think there flippers.
i especially like the one where they buy a house for 700,000 and think they can do 3 bath remodels kitchens and all types of flooring for 30k budget

Five Star

if you have free time go to one of those auctions you,ll piss in your pants