Posts Tagged ‘buying foreclosures’
Beware Renovation Cause and Effect
As I have written in the past, the lure of buying a junker bank-owned property and fixing it up yourself to save money can be both exhilarating and crushing–sometimes all at the same time!
Here is an example of how easy it is to entangle yourself in all the many elements of a renovation. These are all changes we’ve made to one of our current properties. No doubt the future buyer will be ecstatic about all of the lovely changes and updates we’ve made…but before you buy a fixer upper, ask yourself whether this is something you can handle on your own. If so, more power to ya! If not, why don’t you give us a call to see what already-renovated properties we might have available.
Buying Foreclosures – Factor in Some Equity For Your Trouble
It is interesting to me how agents make things sound so “easy” in their desire to make a commission. Recently, I had an experience with an agent who was working with a couple looking to buy a foreclosure property. This couple, being in their early 50s, already had the experience of buying and selling a few homes. These empty nesters were looking to get closer to work and simplify their lives by reducing their long daily commute.
While the couple and I were talking about the renovations that would be needed to bring the property up to the neighborhood standards and regain value, the agent chimed in that it “wasn’t a big deal.” She said that if the owners–who were planning to live in the property during most of the renovation–couldn’t do the work themselves, they could “just hire someone.”
Yes, that’s true. If you can’t do the work yourself, hire someone else. But it is not that simple or easy. Do not discount the fact that your life will be in turmoil if you are living in the home during major renovation work. You have got to pay for this work and keep a close eye on the finances. If you know this and are still willing to take on that situation, you should factor in some equity for your trouble.
A Win-Win Business Model for Buying Foreclosures
I met with a couple local bankers the other day and was very encouraged by what they had to say. I am passionate that we provide a good service (otherwise I never would have gotten into the business). But their support reinforced that we really are on the right track with our balanced approach to helping people find foreclosure/bank-owned homes: they don’t get stuck with fixing up the place, or a high price tag–just a clean, fully-renovated home completely move-in ready.
These guys — one working in Virginia, and the other in Maryland — both got excited about the “win-win” of our business model. They both highly recommended that people interested in getting a great deal on a foreclosure look into our service instead of going it alone.
It just works. For the banks, for you the homeowner, and for us. Here’s how:
We take on all of the risks of overhauling these troubled properties, and get them off the bank’s dead-weight foreclosure list. And you still get a great deal, though a realistic one. You still pay less than market value, but you don’t have to take on any of the risks or hassle of making the place liveable.
It’s a tough market out there, but there are still great deals to be had if you’ve got your priorities straight and can ignore the hype.
Case Study Part 1: Buying a Foreclosure
As someone who has fixed up a lot of properties throughout my career, I sometimes take for granted the real difficulty of it, thinking that it’s not such a big deal. Just don’t ask me to load songs onto an iPod or software onto my computer — that is as traumatic for me as things could possibly be!
Well, over the past year I realized that not everyone has had the good fortune of cleaning up really nasty properties and transforming them into vibrant, nice homes for a new owner/family. What really opened my eyes was the experience of working with the buyer of one of my investment properties.
Let’s call her Jan: a single woman in her early thirties who was going through a lot of life changes at the time we met. After selling her beautiful home to move on to a new life, a few things happened that drastically changed her plans. One major plan was to find another home to live in. She had temporarily moved in with her parents after these unfortunate incidents occurred, but we all know how difficult that would be after being on our own for a while.
