Foreclosure homes to re-sell - any tips for finding worthwhile opportunities?

no help here bill , ill say theres tons of repos around but even if you rehab one theres no one to sell it to . for the first time ever theres a lot of peop;e leaving fl. its getting too expensive to live here

Funny thing, homes are still selling here. Obviously those are ones that do not need so much rehabbing. I know a RE broker who can look them up, and many are selling within a few days of listing.

It is hard to figure out where the money is coming from, but probably a lot of people on the sidelines during the run up can now afford a house.

-- Bill - Turlock, Ca. - http://www.brookswoodworks.com

probably so bill , plus its a good time for the very wealthy to take advantage of the market , rent it out and wait for a rebound . the people that are displaced by forclosure still need someplace to live

I agree with MrTrim on the rent it out idea. Houses aren’t really selling good right now but people always need a place to live. I think we’ll see some changes in this after November’s elections. But then again, now is the time to buy due to this recession. You can get houses cheaper than last year and the rates are still low. So if you want to flip a house, it might be a year before you’ll see profit. That’s 11 months too long for regular flippers. Means having to make payments. Renting would help subsidize those.

-- Dadoo!

Bill are you just looking in Turlock or the surrounding cities also. I have seen a number of homes in the 120’s to 160’s. My 28 year old son is looking for a home to live in, however he is looking for a rehab for sweat equity. About 70% of the roof inspection I am performing at this time are the bank owned, some are purchased by investors and others 1st time buyers. I advised my son to make 20 low ball offers a week and he will get something soon. You mentioned a Broker you are working with are you working with a title company for property profiles and comps with the homes you are looking at? What you have for a down payment and fix up money will determine whether you can rent and get positive cash flow. Most realtor I talk to feel you would need to rent for awhile to wait for appreciation. Keep in touch and we will compare notes when my son finds something.

-- Roofers stay above it all, look out below.

I am looking in the surrounding areas. So far the ones around here have been real fixers, or in areas that would not have a good re-sale value. But, I will keep looking.

-- Bill - Turlock, Ca. - http://www.brookswoodworks.com

The part of the “Rich Dad, Poor Dad” spiel that a lot of people missed was the bit about analyzing your investments as income versus speculation. I think that’s also the part where most people are getting burned, in this ludicrously “up” market it was easy to mistake the gains from price speculation, ie: “flipping”, as income.

So no matter what, I’d make sure that rental income makes economic sense for the price you’re planning to pay for the house, because even if you don’t end up renting it, that gives you a good idea of where the real value of the property lies.

Given that, I think there’s room left to fall, especially in the bubbles that happened around your area. But if you can find something where the rental income makes sense, then it might also be a decent flipper.

If the price of gas keeps going up, will the price of homes keep going down?

-- http://woodsongsfurniture.com

A good question Dennis. So far, it has not made a difference. But, when gas is $3.79 plus in our area, filling up all those pickups will take a load of cash out of someone’s wallet.

I think house buying has picked up a little because of spring. It gets warm and sunny and people go out house shopping. That does not happen so much in winter. So it may be a temporary thing, that slows down again later this year. Or the recovery might be at hand. Who knows, but at least things are selling out there.

-- Bill - Turlock, Ca. - http://www.brookswoodworks.com

First of all, the “news” we all hear applies to certain areas and does not necessarily reflect the market everywhere. RE problems are getting fairly widespread, though. So you still need to be wary. You need to really tune in to your market.

“Normal” areas are still acting normal. These “hot beds” of forclosures are often in areas where all these young junior execs were buying McMansions and stuff, where they couldn’t build fast enough, suburban sprawl, etc. But also other areas, too, like where [no offense intended to ANYBODY, just a common thing] poor people who were taken in by unscrupulous mortgage people by sucking them into stupid financing packages. Areas with people with level heads, decent working conditions and such are still operating at a status quo.

In any case, I would say, treat them like any spec/investment would be treated. What is the bottom line? Can you afford it if it doesn’t sell right away? Can you afford the rehab? What is rent like for what you’ll have in it and would your expenses be covered if you did have to rent it? All the normal questions.

My philosophy is always “Is it a deal?” I mean a “DEAL” or is there some hype in it? There will ALWAYS be another deal coming along.

Don’t be afraid to low-ball the bank. If it’s a $100,000 property under “normal” conditions and they want $95K…offer them $55K. I won’t hurt YOU if they laugh at your offer. You shouldn’t be surprised if it turns out it’s the ONLY offer they’ve had in 6 months!

A house is ripe for flipping when the worst is cosmetic. If the foundation, structure, mechanicals, etc. are solid then the rest is easy. Replacing drywall is cheap, shoring up a foundation is not. I would look for something that requires mostly fixing you can do yourself rather than needing a specialist/heavy construction. The dog of the neighborhood is almost always kicked-in holes in drywall, stains and dog crap on the carpet, busted cabinets, bad lawn, leaky faucets, etc. Those are easy fixes. Termite damage, cracked foundations, rotted roof framing and stuff are bad and expensive.

And yes, gas is affecting prices. The farther away from these downtowns of the larger markets you get, the faster the price falls. NPR just had a presentation on D.C. (I think) and they were talking about how long the commutes were and stuff. The realtors had a specific price factor based on how many miles away from downtown the property was.

Lastly, look at my project here, and you’ll see what I’ve just said is a bunch of crap. LOL. sort of. But, my property was a real “deal” and I ran the numbers through my head for about 3.71 seconds and new I would buy this place.

short story about my project:

My brother is a mortgage banker, he called me for an estimate for repairs for a buyer so bank could factor in repairs for the asking price, standard procedure during financing…etc. I spent about 30 mins. at the place, submitted my estimate, got paid $100, deal fell through, my brother said “You should buy that place.” I ran the numbers through my head, thought for 3.71 secs. and said …”uh….o.k., I guess.” The “numbers” are a longer more complicated story. Next time you can’t sleep, maybe I should type it in as a post….it actually might be relavent to this site.

Once again I’ve managed to go on and on and on…...sorry.

-- arborial reconfiguration specialist

The prices of houses here in Ohio are still going down, foreclosures are up. I was watching one economist who said they have no models to base any forecast on what is going on in the current housing industry, since we have moved into a investment type market, rather than housing being a basic need where a family bought a house and lived in it though the rise and fall of the market. my money is on prices dropping back down a more reasonable rate and if it was me I think I would wait before I would invest, I’m betting there will be better deals coming. but thats in my part of the world and it may be different in yours.

-- Joey ~~ Sabina, Ohio http://sleepydogwoodworking.wordpress.com/