Foreclosure Homes
Most of the foreclosure homes we focus on need minor cosmetic renewal. When we tour properties with investors we keep a constant eye out for major structural issues. Although we are not inspectors, we have a keen eye for identifying the red flags associated with costly repairs.
Often, new investors see foreclosures as huge projects involving tens of thousands of dollars and weeks of repairs. This is simply not always true. We know that rehabbing a property can be costly but we believe in leveraging capital.
The average repair costs for investor properties we close range from $6,000 to $10,000.
A typical formula for buying a foreclosure is:
- Properties in a given neighborhood sell for $125,000 to $130,000. We’re considering a property listed by the bank for $115,000.
- The investor puts in an offer and negotiates the property to $108,000.
- The investor commits $7,000 to repairs, which usually take less than two weeks to complete. Total investment is now $115,000. Meanwhile, the management company markets the property for lease as repairs were being completed. Typical rent in this neighborhood is $1250.
- With 20% down, our investor can expect roughly $300 a month in cash flow and $10,000 in instant equity upon completion of repairs.
The scenarios vary of course, but the point is clear. This is a proven methodology for helping investors convert capital to “instant equity” in real estate.
How to Buy
Utilize the MLS to acquire property. As Foreclosure Listing Agents, we have access to hundreds of foreclosure listings. We also have established relationships with many of the agents who represent these listings, which give us a unique advantage in negotiating on your behalf. Another value-added service our clients find invaluable is our ability to evaluate properties and accurately identify required repairs. This, coupled with our list of preferred vendors who can handle any repair on any property makes the transition from purchase-to-profits, seamless, painless, and transparent.
Utilize the MLS to acquire property. As Foreclosure Listing Agents, we have access to hundreds of foreclosure listings. We also have established relationships with many of the agents who represent these listings, which give us a unique advantage in negotiating on your behalf. Another value-added service our clients find invaluable is our ability to evaluate properties and accurately identify required repairs. This, coupled with our list of preferred vendors who can handle any repair on any property makes the transition from purchase-to-profits, seamless, painless, and transparent.
