Foreclosure nightmare has Beginner still at beginning!

:'(Help please. I’m trying to purchase my first property with my nephew’s help and it’s been a nightmare. It’s a foreclosure, purchase price is $68,500. It appraised for $77,000 as is but appraiser noted house to be in below average condition. That killed the loan; should’ve closed 5/31. Loan was conventional. Went to another lender, appraiser appraised home at $75,000, this time as a condition of the repairs. That killed the loan; should’ve closed 6/30. Another conventional loan. We went conventional because we felt that the house was livable and that repairs could be made while in the home. Noted repairs on appraisal to the tune of $6,500 dollars. Not much and all cosmetic, i.e. interior paint, cracked & missing window panes, screen door needed fixing and appliances needed. Well could someone please, please give me some advice on how to purchase a property such as this. I’ve checked into some hard money, but this is a house that would be his primary residence. His credit score is 630; he qualifies for 100% financing the conventional way. Just didn’t want to incur such a high interest rate with hard money on a first property that he’d live in. Help please!

Out but not down,


Short term hard money might not be a bad thing! The only problem with that if finding a HML (hard money lender) That will loan on that value! If he does hard money for a month it will not hurt to bad! Also if you do not mind me asking this what is the full deal behind the property is it vacant? Are flipping the property to the buyer?

If the property is vacant is there any way to do some of the mild repairs that it is in need of prior to close?

Howdy Lilbee:

Why even bother with this no equity deal. Even with the $77,000 value and repair costs of a low $5000 estimate there is very little equity if any by the time you figure closing costs and even especially if you add in the HML fees and interest. Also a HML will only lend 70% of the after repair value with gives you a loan of only $54,000 using the first appraisal.

You would be better off, less hassle, going thru MLS and getting a house in move in condition.

this looks like a terrible deal; good thing it did not close; move on to something else

That all depends I sell whole sell houses that I only make 3-6k do ten a month you make 30-60k per month! Grab the nuggets!

Thank you for your responses. To REO Consultants, yes the property is vacant. We plan to lease it with an option to purchase so we’ll be holding on to the property for at least 2 to 3 years. Someone did mention to us that we might want to go in and do the repairs, then have the appraisal come back out. The bank that owns the property would allow that, but being a beginner, we are too afraid to take that risk and then have something fall through again. What do you think?

T ::)o Ted Jr, thanks again for everyone’s response. Ted, the after repaired value of the home should be roughly $114,000 according to the first appraisers evaluation. The $77,000 is an as is appraised value. The house last sold in 2001, according to the tax records, for $117,000. Based on a purchase price of $68,500, I thought that it would be a pretty good deal with some equity after the repairs are made. Please let me know what you think because I am new at this and don’t want to make any serious miscalcs. There may be something that I’m just not seeing. Any information you provide is greatly appreciated.

I honestly would have to see the whole deal how close are you on getting the loan approved? how many others are looking at the property? What repairs need to be done and how cheap can you do them?

if we assume the purchase value (in 2001) of $117k was reasonable, then why is the apprasied value drop by 35% to 77k. You said it need some repairs (6k or so), but the number don’t seem to add up…more details, please. something is missing here.

I might have been a short sale situation maybe that is the price they got it down to or maybe it needs that much work. Might even be that is what the BPO came in at. I just bought one last week that the BPO came in at 252k my appraisal came in at 310k I always take both numbers add them and divide it by 2. As we all know you can get an appraiser to say anything and realtors just want the money so they go for a quick sale. So I say it is worth 281k. I bought it for 220k so I got a fair deal on it. The real key to this is not buying it is selling you do not need sellers as much as you need tenants and or buyers the deals are everywhere! And I mean Everywhere! but what good is it if you can’t do anything with it after you buy it?