This home just came onto the market and its a foreclosure…
The asking price is 34500
It has brand new vinyl siding… 3 bedrooms, 2 baths and is roughly 1800 sq feet…
The interior has decent carpet, windows, kitchen cabinets, and it even has what looks to be a fairly new heat pump…
The interior walls are mostly paneling which i think is ugly… But as a rental would be just fine… There is also a detached garage…
Overall very nice and would rent for 600 to 675 a month here in ohio where i live…
taxes 40 per month… insurance 40 per month…
I’m thinking about offering full asking price of 34500 or should i offer 35000… I’ve heard that some foreclosures get higher asking prices… But i’m not sure… any opinions on if this is a good deal???
The only thing i would have to do to make this rent able is buy appliances and put them in…
should i offer more to make sure i get it or what??
payment would be about 255 a month… with 20% down if i offer 35000 on a 3/1 arm or 30 year fixed… I would save about 600 on closing costs to go with the arm vs. the fixed…
There isn’t that many buyers lining up, even for forecosures in Ohio. This sounds like a decent opportunity but I do not hold SFH as rentals. No real money/cashflow in them. Could you flip it?
not really looking to flip… as/is property is probably worth 45 to 50k… put a little money in it 5k to update walls and flooring you could prob see 60 to 70k …
The reason I don’t like SFH is you can’t shelter yourself from vacancy. If it’s empty, you are taken in no money. In my are of Ohio you can buy duplexes for this prcie. Is it an option to live in one side and rent out the other? As a rental it may do OK. You are talking about $350 roughly for PITI which leaves $250 for all the other expenses involved in holding it as a rental. It may be breakeven but it really won’t generate much cashflow, especially at $600/month rental income
ARM rates I am looking at are higher than 30-year fixed rates. ARMs are for those investors who will only hold their property for a short time. If your holding period is less than three years, then go with the ARM. If you honestly believe that interest rates will fall in the next few years, then go with the ARM loan.
On the other hand, if you are planning to hold this property indefinitely for rental income, then the fixed rate loan makes more sense in this economy.
I believe that this property is priced too high for you to hold for rental income. Rental property owners buy for cash flow, appreciation is just a bonus if it happens. I don’t see enough cash flow in this property to justify a $35K purchase price. If the property needs $5K to put it into retail condition, then it will also need $5K to make it rent ready if you want top market rents.
I believe you would get more cash flow investing your $12K in one year CDs than you will get from the rental income from this property.
If you set your maximum price point at $23500, you have a much better chance of seeing enough cash flow to make this property self-supporting. There may be buyers who will pay more than the list price, but these buyers are purchasing as owner occupants. Successful rental property investors do a detailed cash flow analysis and then only buy at a price that makes good business sense.
its listed for 35000 why offer full price ?? If it was an underpriced property that you could flip then i would understand but a rental i would be more stingy with offers.
Ohio is close to michigan in unemployment rate so i would think theirs alot of foreclosures, thus a lot of good deals on rental properties.
is there other properties that you could rent out for around that price ???
maybe try offering 30k with a short acceptance time say by friday. if they dont accept by friday and you really want it then offer a higher price.
by the way did a realtor tell you that foreclosures are getting full price offers or higher ?? I was told the same before, i’ve actually seen some go for above asking, but it is not true 95% of REO’s are sold below asking.
Be a hard ass with banks !! they’re banks they dont get insulted, realtors care more about the offer price than the bank. because a realtor prices their listings and would silly if the offers all came in @ 50% of the listing price.
not many properties in this property range could bring 35000… most would need 5 to 10k work just to get 650 or more on rent… also we recently lost out on a property(foreclosure) that the asking price was 29k… We offered 32k… And was told we had to offer more… They sent 4 offers in at once… we had the highest offer of the 4… We came back and offer 32500 and was told we would prob get it…However another realtor came along and offered 36k and got it… This house is listed at 33500… we are offering 35k… The other house would have required 10k or more to get it rentable… This house we are offering 35k on is rentable as is…
one kicker is the location… the other property was in a much better location…
all i know is i live in a small city (20k pop) so when a foreclosure hits the market there are tons of people looking and sending in offers…
Would you please share your cash flow analysis with us.
How much will you spend each year on advertising, cleaning, legal fees, property taxes, hazard insurance, repairs, preventive maintenance, utilities, snow removal, and trash removal?
How much are you planning to set aside each month for major systems replacement (such as new roof, or HVAC)?
This is a pretty good deal. Personally, I like $100 per unit per month, so offering a little less would make this a better deal. However, I don’t think this is bad for a first deal.
Just wanted to let everyone know that our offer for 35k was accepted and we close in about 30 days… any opinions on 30 year fixed with $600 more due at closing vs a 3/1 arm…
I’m leaning toward the fixed due to the fact this is a long term investment as a rental…
Also anyone have any ideas on how to get pet smells out of carpet cheaply and easy??? the back room as dog smells… YUCK!!!
No single families as rentals in this market unless you can steal them…and I mean low.
$500/month profit after after after.
Tenants know the market sucks and they are not paying rent as a result…don’t ask me how this works.
I think they figure that if a house is nearing foreclosure and their landlord may or may not be making the payment, they probably should hold on to their money just in case the banks come and evict them.
I agree with Brokovich…no SFH for rentals. Tri-plex or more to shelter against vacancy.
My sincere recommendation is to work yourself into property deal where there is enough juice to afford management.
My first deal lost me $32,000 CASH. Be patient, the right deal will come along.
Flip a few to get used to the process…and don’t buy someone elses problem.
NO ONE is over bidding in this market. If anything offer $28k all cash and flip it to someone for $32k.
If they don’t accept it wasn’t meant to be.
I can’t tell you how many times I drove by properties that people NASTILY outbid me for only to see a for sale sign out front for as much as six months after the rehab. Most likely they lost money because they paid too much.
I would not take out an ARM in this market for a buy and hold. Lock in the current low interest rates; know exactly what your payments will be for every month of the next 30 years. It makes budgeting easier.
If I am wrong and interest rates take a huge plunge, then you can refinance. But I can’t see interest rates going down, and I expect the FED to eventually raise rates because of inflation. (I thought they would at least 3 years ago, and I’m still waiting)
It’s unlikely that your ARM will adjust any direction but up.
No single families as rentals in this market unless you can steal them...and I mean low.
Whether you buy a SFH or a multi, you must always buy at a BIG discount to market if you want the property to cash flow. So, your comment about SFHs is irrelevant.
$500/month profit after after after.
What kind of gibberish is this? $500/month after after after WHAT? For how many units? $500 per month would be great on a SFH, but I’ve never seen one that was even close to cash flowing $500 per month (without buying the cash flow with a BIG downpayment). $500 per month on a 25 unit building would be a TERRIBLE cash flow.
Tenants know the market sucks and they are not paying rent as a result...don't ask me how this works.
RIDICULOUS NONSENSE! I haven’t had a single payment fail to pay the rent because the “market sucks”. Moreover, in many areas (including a lot of Ohio, which is the market being discussed), the rental market is the best it has been in many years! Rental demand is high and vacancies are extremely low.
no SFH for rentals. Tri-plex or more to shelter against vacancy.
More nonsense. SFHs are more forgiving as rentals than multis and generally make much better first rentals. In addition, a vacancy rate of 10% is no different in a SFH than in a triplex.