Buying Foreclosures, REOs. Short Sales, FSBO, MLS and More

Hi there...does anybody have any knowledge about buying a property that has mold? I just saw a property listing that says it has mold in 2 bedrooms closets and the hallway. Is it a nightmare to fix a problem like this? I am looking to buy and rent out for a cash flow? Thanks...

May 26th 2008

Here's something that recently happened to me - and I missed out on alot of money! Anyone ever had an experience like this before?

I recently found a pre-foreclosure in a great area of Scottsdale with over 100k of equity in it. I called an investor named Jake White that I was referred to through a mortgage broker I know, and told him about the deal. THEN I MADE A BIG MISTAKE!

I gave him the address of the proprty before we signed any contracts. He sayed "we'll be partners and I'l split the profit with you"

Found a home that is bank-owned. Did a drive by to check out property. The home is in a good neighborhood and it is the "ugly" home on the block. Looks like there is still occupants. The amount asked is way below market value. This home I believe would make a good profit.

What is the next step? Do I talk to the occupants/owners or do I talk to the bank since they now own it?

Not that I have a buuch of time behind me doing this, but I saw something this week I had not noticed before. In the description of a real estate listing on a web site, they stated this home was in "pre-foreclosure." My question is who might have listed the home...the bank or the owner? I looked up the property in the county records and there has been no change of ownership and it certainly does not show a bank as owner. Is this a common practice and would it be a good time or even legal??? to contact the owner?

The term foreclosure signifies all three stages of foreclosure:

- Pre-foreclosure
- Foreclosure Auction
- REO / Bank owned

Purchasing an REO, auction or pre-foreclosure IS a Foreclosure.

The Pre-foreclosure:
The Pre-foreclosure starts when the person who owns the property is late on their payment.

After the late payments the bank or finance institution will send out demand letters.

If I am planning to rent a SFR up to a Four Plex I will have done my purchase formula that I have listed earlier then will follow this formula:

"-" equals minus

Rents in area
- Profit I want month to month - usually 10% of gross rents
- 7-10% of gross rents for management cost (even if I do the managing)
- 5% of gross rents for repair fund
- Monthly costs I pay for such as taxes, insurance, utilities, lawn care, etc..
- Other additional costs I might have
= The most I can pay for a mortgage payment

I have an add up on Craig's List for my company WW Land and I got a call today from a guy who represents investors.

He wanted to know what my business was, so I told him we do construction and remodeling and we are starting to get into foreclosures. As far as the foreclosures go, we look for properties in the 200's range that have a lien on them for significantly less. We then buy them, and either rent them out or resell them.

How much stock does one put into the FMV of a home found in the courthouse records?

If you have questions about rehab or construction problems ask them here. Please look to make sure your question is not there before you ask and add plenty of details when asking. There may be codes and permits that are city oriented so please check to make sure you keep them in mind when making any changes to your project. When completing these tasks please keep in mind saftey of yourself, others and property around you. Lets keep this forum clean and uncluttered. Good luck everyone in all of your projects and in everything else you strive to achieve!!!

I am a business owner and I want to get started in foreclosures. I recently went down to the courthouse and got a list of all the foreclosures in my area from the last 4 months. I went through a few and saw some that were really good deals and a few that were not at all.

I have about $100,000 in cash that I can use to buy some property at auction, but I don't know if that is the best way to go. I need some advise on what to do next. I have a realtor I am working with so I have that base covered. I have the cash. I even have the corporation that I can put the property in once I own it.