My wife and I are in the process of moving back to Washington State and are going to be buying a home shortly after arriving there. We really want to find a fixer upper that we can get for a good price as we plan on only living there until we finish the rehab work and then sell for hopefully a decent profit. We would really like to pick up a bank foreclosure at auction but are running into problems as far as financing is concerned. We both have credit scores in the 750 range and have a decent amount of liquid assets. I know that there has to be a way to finance a deal like this and want to know everyones oppinion on what would be the best way to achieve this being that it would be a foreclosure and we most likely would not have access to the property until it was purchased. Thanks for the help.
About the only idea that comes to mind is a hard money lender or unsecured credit card debt. One of my HML will come to the auction and buy the property for me and then finance it after the sale. He charges $1K just to show up. O have not done it yet because I did not want to risk the $1K and not get the property for the price that I wanted. I ended up buying that one from the note holder after the sale with another lender. With a 750 score you should have good enough credit to get several $15K credit cards and go for it. As long as it is short term the rate does not matter if you get a bargain. I am willing to pay 36% for short term money, surely you can afford 14 to 18% on a great deal.
HML’s will do that? In my area I have noticed that the great majority of foreclosures that go to sale are baught mack my the bank, typically for the amount that was in default. Will a bank get into a bidding war with you, or will they be happy to get the loan off their books?
Some HML’s will do it. I would call and talk to some and see what they need, appraisal, inspection, title report, etc.
No banks will only bid what they are owed on the loan including attorney fees and other costs including late fees, appraisal, inspections etc.
tedjr. Thanks a lot for the response. I think that I might just try to find a fixer upper that is listed on the mls and save the foreclosures to fix and flip. Thanks for the advice.
I am confused on why you can’t get a conventional mortgage?
With good scores like that and good reserves you should be able to do an 80/20 on the purchase. Did I miss something?
When you get there you can find an agent that lists all bank owned property and work with them until you find a great deal. Banks tend to use the same listing agent so when they see one coming they can let you know right away. If using a mtg broker does not work then maybe you could work with a small bank that holds there loans. They are some times easier to work with in a bank owned property. PS do you own a home now?
Good Luck to you.
Ramona. I was originally wanting to go to a foreclosure auction and bid on a property before it become an REO. I guess that an REO would be an awesome deal as well. What is the easiest way to get a list of REO’s in a given area? I am not to familiar with REO’s. Yes this will be our first home. We just want to find something with potential that way we can build alot of equity in the home and take a HELOC out eventually to finance our first rental property. I have been reading up on real estate investing now for some time but figure that I should get my primary residence before beginning to pick up rentals or rehabbing properties.
There are a number of sources for finding REO’s, http://www.buybankhomes.com/ is a good place to start.
In my opinion pre-foreclosure is the best way to go. Purchase the property from the current owner before the auction. Not only can you score an awesome deal, you can help someone avoid an ugly process.
Just my $0.02
Sorry it took so long to reply. I had a busy couple of days.
Pat is right on with www.buybankhomes.com
Sign in and pick the counties or cities that you want to search and then start watching the Real Estate Agents that are listing those properties. There will be a common theme with the agents they use. Then contact that agent and set up a time to meet with him and tell him what you are trying to do. Then have him set you up on a flash to get new listings of bank owned property within 2 hours of it hitting the market.