foreclosure on Long Island -
Comps From Zillow.com - and I know the area:
This home looks to be very similiar to the neighborhood homes - just neglected, but has VERY nice stone work and is a corner lot, across from a home currently asking - 529k (this house is updated cape - with smaller lot).
this foreclosure happens to be well below market (most “foreclosures” on the island will run you over 250k and most are in the low 300’s).
So, I know this much:
On the day of auction, successful bidder needs 10% of their bidding price on the spot (via cash or certified bank check).
30 days from date of successful bid - buyer needs the remainder of purchase bid price.
property is sold “as is”.
I figure, even a successful bid of 190,000 would be an EXCELLENT prospect.
given the “cooling” market here (despite the fact that houses are still moving according to realtors i speak to) - even if this house was rehabbed and put up for sale for say…335,000 (and that would be a steal) - it might look something like this:
Bid Price: 190,000 (highest amount of my company’s bid)
ARV/Sale Price: 335,000
Gross Profit - 145,000
Holding (1 full Year):
Insurance 2500 (200 month)
Misc 5000 Total Expenses: 45,000
Net Profit 100,000
Now the question is how many variables did I leave out?
What are the possible pitfalls?
And will 190k get me the property?
And how can I have this money in 30 days after bid date? Any referrals/suggestions? Anyone know of any HML that will invest in property with pay out being contingent on sale of home (another words - there’s no monthly mortgage to deal with - HML simply gets X% guaranteed from sale of property).
This house could easily be put on the market as well for much higher than 335,000 - I’m just adjusting for a 15% or so reduction in prices due to market cool off. Also, a projected holding of 1 full year at that price with the flexibility to go lower in price or offer buyer incentives is very conservative. Am I wrong?
Buy WELL below current FMV
Rehab with RSM Construction and Ambra Woods Inc. (my brother and uncle - licensed contractor).
Even if you adjust for a 25% reduction in FMV due to projected market cooling - ARV/Sale Price - 300,000
There are over 100 homes for sale on MLS in this particular town. And yes, on Long Island it is increasingly becoming a buyer’s market - but that buyer still is shelling out over 350 in most cases for anything that has 3 bed’s and a bath.