I have been working on this deal for several years now and next week we will close on the best deal that I have made to date. In 2006 I bid on a HUD home for 20,000 , It needed a lot of work as the foundation was giving way and 2 of the floor joists were broken and the main floor sagged because of the floor joists. It also needed paint and carpet and a kitchen update. Since then HUD did not accept my offer and I put the same offer in every month until I found out that It had been taken back by the county for back taxes. The county sold the home to the local city that I live in and I started to negotiate with the city for the property. The city sold the home after 6 months of negotiating with me to Community action agency. Community Action Agency kept it for 2 years and paid the taxes but did not get the grant from the government that they wanted. Now with budget cuts and other problems Community action agency sold the home back to the city. About a month ago I got a call from the city manager to inquire if I was interested in the property. I confirmed that I was still interested , but i would like to see it again and make a new evaluation . He got the key and I went and looked inside. The foundation had been fixed and the floor joists had been repaired , but all else had remained the same as before. I talked with the city manager and he said that he would have to run this past the city council and they would most likely want to put it up for auction. I said if they did put it up for auction that I would only bid a minimal amount that I do not like the blind auction process. The city put it up for auction and to make a long story longer I was the only bidder. My lawyer is doing the title work and as soon as they get that done we will close.
Purchase price $20.00 + closing costs of approx 300.00( yes $20)
Fix up costs $3500.00
ARV 65,000
House will rent for 650-750/mo
4 bedroom /2 bath corner lot
Now that’s what I like equity and cash flow.
Awesome work. $20 - That’s crazy. Sellers always seem to think auction will bring in top dollar for some reason. Just bought a condo for $74K - the sellers rejected a pre-auction offer of $90K… so they had to accept $16K less AND cut the auction company in on the action.
Congratulations! That’s quite a story.