There are a lot of homes in foreclosure in our neighborhood. The other day, OJ raised the possibility of purchasing one of them, one of the ones at a ridiculously low price, fixing it up, and either renting it out OR moving into it ourselves and renting this one out (the deciding factor being, of course, which house we like better and which suits our family's needs more at this time). We haven't really had a chance to discuss it since but this is not the first time this possibility has been raised for discussion in our married life (though I think it might be the first time HE has raised it, which you know means I'm chomping at the bit to MAKE IT HAPPEN, naturally, since it's been a dream of mine for years now!).
I don't know if this is something we are going to decide to explore at this exact moment or not. There is a lot of planning and work that needs to go into a decision like this and it might end up being the wrong time for us. I DO know that both of us are concerned about me being out of work and are looking for ways to bring in extra income once my unemployment runs out. (Yes, I know real estate and rental properties are not a 'guarantee' of income.) I DO know I have always wanted to buy real estate, own rental properties, and fix up houses. I DO know that it's been killing me that home prices are so low right now because I feel it is the perfect time to buy (because I DO believe home prices will rise again), and we haven't been in a position to buy.
It's been a while since I did any home-buying research because it kind of kills me to shop but not buy (this holds true for every kind of shopping, not just houses, heh; this is why I try not to GO shopping unless I have money to buy things). I know the internet is fallible, but I always turn to the internet to start my research because it's the easiest source - it's right in my living room, after all. Sorting through the muck can be difficult though, especially when it comes to something like foreclosures and buying homes. I love reading about people's personal experiences with things, so I'm wondering... do any of you have personal experience with buying foreclosed homes, fixing up homes, and/or being a landlord? Would you like to share your stories with us?
Here's what I'm NOT looking for. Comments like:
"Oh my god, don't do that!"
"you'll regret it!"
"buying a foreclosed home is a TERRIBLE idea!"
"fixing up homes is such a pain in the ass!"
"being a landlord is such a pain in the ass!"
and so on.
It should go without saying that those types of comments are opinions. As with ANY experience in life, YMMV (Your Mileage May Vary). Furthermore, what you deem to be a 'terrible idea' or a 'pain in the ass' might be something I love to do... the glory of life being we all have different opinions and different things we enjoy.
What I AM looking for is actual stories from folks with experience in this area, with pros AND cons they personally experienced. I love people's stories anyway (that's why I'm a Heritage Maker after all), and in this case your stories might help us, now or in the future!
Likewise, even if you have no personal experience in this area, but you have interest in it and you have a great resource to share (whether it's a blog or a great free foreclosure website or a TV show you like to watch), tell me about it! I might know it already, but then again I might not.
Thanks, everyone. Looking forward to this journey, whenever it happens for us.
photo by Gary Friedman of www.FriedmanArchives.com
We want to do this too, but don't have the money to invest in it now...but would love to do it in the future. Every time I watch a house flipping show, I can see the glint in hubs' eyes.
ReplyDeleteLeslie
Something good to know...
ReplyDelete1. get whatever property INSPECTED... b/c that can be a very good indicator whether or not the place will be a money pit to keep up to code.
2. most banks will not loan to you for an income property unless you have 6 months of payments in savings and that that chunk of change has been there for a little while.
3. you *CAN* include the potential rent of the property as INCOME BEFORE you buy the property to convince the bank to lend to you
4. if you low ball too much on the bid price, they won't take you seriously
5. there are realtors that make their entire job JUST dealing with foreclosures and a tactic they use (which is how we got this house, through one of those kinds of realtors) is that they will set the asking price *REALLY*REALLY* low to get people EMOTIONALLY invested and then a BIDDING WAR is created...this is exactly what they are looking for. How we got this house, beyond the bidding war(the one we live in, the one in logan was a regular purchase not a short sale)...is to do your comps and present them with a price that is no more than 20% less than the comps and then usually you'll get a counter offer.
5. I know we've not done this a million times but he made 6 offers on 6 properties before we got this one...mostly b/c the homes didn't appraise for what the asking price was..and then the bank will refuse to do the loan...but we learned a lot in the 2 years that we looked at lots and lots of short sales and foreclosures.
GOOD LUCK!!!