its supposed to be steadily coming up - and honestly- its a nice neighborhood already. I never would have guessed that so many of the homes are in pre-foreclosure. Historically speaking, the neighborhood has always been very desirable as well. Very residential- lots of families. There are some homes that are multiple units for rent (such as the one i currently live in), but the reason i say that many of the homes for sale are in need of major rehab is because the homes are being sold by older folks now moving in with family, or moving to a home. Older people cant physically keep up repairs with 2 and 3 story houses that are anywhere between 2-3,000 square feet. The roofs need work, none of the houses are insulated, the heating system is outdated, the plumbing and electrical is outdated, etc. But still a good neighborhood.

I should add that the block where this particular property is located does have mostly 2 story houses that are around 2,000 sq ft each. Its actually one of the smallest houses on the block, and its right next to another house that is pretty darn cute, but even smaller at about 800 sq ft. There are a couple houses down the block from it though that are the typical 2 story homes, not in foreclosure but still for sale, listed at about $170k each.

Do you have the cash flow to make this happen?

To be honest- im not sure. I have a good amount in savings- but thats also my ENTIRE life savings. So understandably, i dont want to use all of it in one shot. I looked up costs of demolishing a house in my area and i saw an average of like $8k for demolition, which i can pay for.

I also read- and not sure how true this is- an article on trulia.com about the hidden costs of foreclosures as far as liens etc that said:

"However, when you buy a bank-owned property that is listed for sale with a real estate agent, the closing costs are the same as they would be if you bought a non-foreclosed home. Overdue property taxes, HOA dues and other bills left behind by the defaulting homeowner are cleared by the bank that owns a foreclosed home before it is sold on the market, though these items should be watched out for if you buy a home at the county foreclosure auction."

Obviously, I need to research that more, but, as far as whether i can pay for the demo & rebuild completely, it would depend on whether or not theres a bunch of liens etc I need to pay for the property, and of course i would need to look for a contractor to build the new home. Since this is Western NY, supplies are less expensive than say NYC, and my desire is to build a small home, so I would need less supplies in general, im not sure if anything would be salvageable from the current structure to save on building supplies, like the wood from the flooring for example, but I would probably look to take a loan just incase and then pay it back. If there's a large amount of the loan leftover, and i still have a good amount of my own savings left- I would look to just send the rest of the loan amount back in one big payment.

I think the biggest cost would be the cost of the rebuild versus the demo. I have been researching and see there are design+build firms that specialize in smaller homes and some of them offer floor plans that you can choose from and tweak a bit- like wanting less kitchen- but larger bathroom area. I've also found floor plans that I can purchase and hire a local contractor to build as is. The plans alone are anywhere from a couple hundred to almost a grand depending on where you buy them. So I would be able to pay that out of pocket as well. I would need quotes, and then i would be responsible for the cost of materials, any inspections, permits, the electrical & heating systems, appliances, etc.

There's also some stuff i can do myself- like landscaping, or staining the floors, painting walls, shopping for my own fixtures over time as budget allows, etc. that will save me money as well. I've been watching Rehab Addict on netflix to gain insight on where i might be able to save money by taking the time to do some of the stuff on my own.

Watching TV isn't the same as actually doing the job. Not by a long shot. Get some real experience under your belt. Volunteer with Habitat For Humanity or help a friend build a garage. Hands on sweat. And keep on saving. Your wants are out of the norm, and banks aren't happy taking risks for out of the norm ideas. A cash sale to an experienced DIYer can work. That ain't you. Yet. Work on making that you.

I like your train of thought, and Sophie has great advice. Whether you actually do this project or not, what you learn by research and *doing* will stand you in good stead.

It's usually good to own one of the smaller homes in a neighborhood as long as the neighbors are able to pay their taxes and maintain their property. (That may not be the case where you are looking.)

A whole-house demo is the fastest, easiest, cheapest way to 'remodel'. It's all down and gone in a day rather than being picked apart bit by bit with a hundred large and small 'surprises'. Often disposal is the most expensive part of the deal. If you want to keep a basement, and maybe a chimney, this requires a little care on the part of the demo team, and you want to know in advance that the 'keepers' are worth keeping.

Few model home plans are going to fit your demo-ed foundation, but you can glean ideas of what you want.

How long might you live in this house? It will be a lot of work to result in a house that's too small when you start a family. I'm not sure you'd get your investment back if you sold in a short time.

I've done light conversion construction before and have built some of my own furniture and come from a family of Ironworkers. I've also done all the landscaping where I currently live. Painting my own walls, floors and landscaping are things i've done before that are simple, and thats money I can definitely save.

As for the neighboring properties - they're in good standing. The backyard on one side looks overgrown but that could be spill-over from the yard of the property that im looking at too. The block itself is nice, quiet and clean.

Thats a good point about the disposal of the demolished structure. There's no fireplace or chimney, and I don't 'need' a basement unless building codes say i have to have one so i can't think of anything that i would want to save. As for the foundation- thats also true. When im ready to start the project I would need to see what the contractor says about building on the current foundation. Right now, all the homes and buildings im looking at for inspiration are either square or rectangle shape and are open spaces, so I would want to follow the suggestions of the contractor so ensure the integrity of the foundation isn't compromised in any way, even if that means tweaking the floor plan.

Right now the only 'requirements' i have for space layout in a new home are a lofted bedroom with a dormer and a staircase with storage underneath instead of the ladder you typically see in 'tiny homes' because i don't want to fall so if the space needs to change a bit then im ok with that. My real requirements are efficient insulation for the walls & roof, windows, and the hope to have solar power.

I would also look to live there for many years if not permanently. There are zero kids in the future so thats not an issue for me. I have a dog but im sure we'd be able to make it in 500 square feet. For perspective, I grew up in a summer bungalow that was later sold as a full time dwelling. I have 3 sisters, so it was 4 girls, Mom & Dad in a one-floor, 1 bedroom, 1 bathroom home- with around 400 square feet of floor space which probably explains why my larger apartment feels like too much space.

This is all food for thought and gives me a good starting list of questions to ask when im ready to build in the future.

So before we go any further, let's start with some questions. I used to build homes, and did a lot of flipping in the early 00's; and I even owned a 400 square foot house that was a rental.

1. Will a new, 900 square foot house on the existing foundation even meet current local zoning codes. The reason I ask is that 400' I owned could not be built today.

If the answer is yes:

2. Will the existing foundation meet today's code.

Even if it doesn't, that doesn't have to be a show stopper, and here's why: demoing a complete house isn't all that expensive. Demoing all of the house EXCEPT for the foundation very well could be, because you just can't bring in an excavator, knock it down, and then scoop it all into big trucks. It has to be taken apart, to a great extent, by hand. Big labor costs. The more I think about it, the more I'd rather just have a new, modern foundation to begin with.

And if you do that; you have a clean sheet for whatever you want in the first place.

Check the zoning laws first, then we can go from there (and you can probably do that online, and get back to us).

So far- the answer to question 1 is yes. The local building codes here specify a minimum of 176 sq ft of living space per person which doesn't include the bathroom space- so since its only me- it would be up to code.

As for the foundation- thanks for pointing that out because i didn't even think about that, but it makes a lot of sense that you'd have to take the house down manually to avoid destroying the foundation thats left.

i wonder then - if you remove the entire thing, would that also destroy the pre-existing water/sewer lines as well?

It looks like we will have to build where our old farmhouse is as well. All of utilities will have to be marked before the demo so hopefully you will have a good team that pays attention to neon colors. Also make sure equipment isnt getting close to trees. If they compact the roots they will die.

You may have to replace the water and sewer anyway. My new neighborhood was originally built in the 50s. The water and sewer is getting to the point where the city is going to need to replace them. But rather that eat that cost, anyone who builds HAS to put in a new water/sewer connection. And they're charging a mint for it.

Second, 500sq' might be good for you, but it sounds like a hard sell in a neighborhood with 2000sq+ homes. I tend not to worry too much about resale, but there is a point where you're going to be spending a LOT more than you could ever get back. And that'll make getting a loan harder. If a bank can't take the property and easily sell it for at least what they loaned you, they don't like to deal with it. If you can even get the loan, the interest will be incredible.

I would probably buy the 900sq' place and reno it rather than rebuild it. Cheaper, and you can live in part while you work on the rest. And it'll be worth WAY more if you decide you want something different.

You should connect with a good realtor who can advise you. There are a lot of surprises with these kinds of properties.

We bought a 1200 square foot house that was part of an estate. It was the worst house on the street by far, but it's a wonderful neighborhood, a larger than average lot, a wonderful view and 15 minutes to metro city center. We were stoked! Unfortunately, after we bought the house and started peeling back layers of wood paneling and indoor/outdoor carpeting we realized we were in a situation where it might be better to level the whole place and start over.

We crunched all the numbers over and over and despite people saying we were crazy we decided to gut renovate rather than tear down. A few things to consider: 1) the demo and debris removal alone on our house was estimated at $15,000. Crazy! 2) Permits for a renovation were 1/3- 1/2 the cost of the permits required for a new build 3) The time involved in building (and needing to rent an apartment) would have been longer and thus more expensive 4) it's my assumption that our property taxes will be less as a decades old home rather than a 2015 home. 5) a lesser concern, but still, it seemed awfully wasteful and not "environmentally friendly" at all to tear down walls and a roof to put up walls and a roof.

Financially speaking, if you're considering a renovation it would be wise to have a few general contractors walk through the house with you and tell you what it would cost to renovate. And then add %20 to that. If you don't have at least 20% down plus the renovation money, I would not do it. Homeownership is great, but renting has it's benefits too. You don't want to be house poor.

i'll have to check into the sewer situation for sure, i wouldn't be surprised if the City required new connections as part of the build. I read that you should get an inspector to send a scope into the system lines to check for things like blockages and tree roots etc to make sure you don't finish building the house and then have faulty sewer/water lines when you buy an older home no matter what. There's still a lot of research for me to do.

As far as the square footage, i'm gonna have to talk all this over with the bank to see what id really be looking at because its confusing- while the neighborhood in general is average 2k sq ft per home, this property is on a block with much smaller homes and the city building codes would not allow for me to demo and make a large house next to a house that has even less space, plus (my dad) mentioned to me earlier today that new codes might require a certain amount of space between the edges of the house and the property line to ensure that house are not built like inches apart from each other. If thats the case, then it definitely wont work to have a larger home on that lot because it isn't wide enough for a bigger home.

But maybe this all also depends on the kind of loan? I haven't researched loans that much yet but from what im seeing i would need either a personal, or 'construction loan'.

From what i've seen so far, credit unions offer better rates, and i have excellent credit, but there's zero point in buying property to demo and then building a home that I don't want. And if it turned out that renovating it was more cost effective, i'd still be looking to decrease the square footage. Its definitely something that i need to research more and then speak to the bank about before I go looking for any contractors, etc.

Thanks everyone so far for all the input-its very helpful!

Unless you have a significant amount of money, you are probably not going to be able to reduce the square footage by any meaningful amount. I am dubious that the financing will work out with a 900 square foot house, and I would be amazed if the finances worked for anything significantly less than that.

Houses are often thought of as a price or value per square foot, while useful, it is a fundamentally flawed system, because it undervalues incremental costs. The most expensive parts of house are expensive to install even once. The kitchen is the highest, followed by the bathroom, but really the first bathroom is the most expensive to install and the rest are incrementally cheaper, Installing HVAC, electrical, plumbing, etc. are all expensive to do even for a small house, and a small house doesn't have the square footage to spread those costs out over.

Unfortunately, the price per square foot is set, at least in part, by the price per square foot of the neighborhood. The house is going to have a difficult time appraising for the costs to remodel even 900 square feet, and I can't see any way a 500 square foot house would appraise even near the cost to build (this assumes that you are in a typical city, the house might have less problem in New York City or San Francisco).

I do have a significant amount of money and its likely that i could purchase the property, and demo the current structure completely in cash. The idea for me for specifically purchasing a foreclosed home, is that the bank is making zero dollars on it, so they're motivated to sell it. That for me would allow me to have a good size lot thats in the city, and in a neighborhood i like. My worry as far as cost & financing is really about installing those systems you can't get around - electrical, plumbing, etc. Naturally they're expensive and they aren't cheaper just because the house is smaller. I would've hoped to continue using the current sewer lines since they're already there but someone made a good point that the city may require new lines to be installed anyway so i'd have to research it more. Like i mentioned earlier, I would be looking to install energy efficient systems like a tankless water heater, either purchasing or leasing a solar energy system, an absolute must is insulation for the walls and roof, and i would want energy efficient windows as well. I can probably foot the cost of everything on my own, but it would take my entire savings which is why i would hope to finance the project, and pay back anything that isn't used from the loan and pay back under the terms whatever i did use comfortably. Plus I would still have savings just in case of emergency.

Insulation, proper windows and the tankless water heater are items that i know will cost a lot upfront but will also pay for themselves in energy savings as i live in the home. Heating in Rochester is insane- the average apartment costs around $500 a month in heating costs alone. And thats for apartments, an entire house is much worse. Also, Rochester can require heating from late September to May. We really go from a couple weeks of fall, to months of harsh cold winter, to a few days of 'spring' and then a couple months of blazing hot summer, then back to the cold. A smaller, more efficient house beats paying double rent for most of the year because of enormous utility bills.

For the solar panels, i would look to get a consultation for that to see if it would really be worth it given my geographical location, its something i need to learn more about.

As far as being denied a loan specifically because the house i want to build is small, i'd have to check with the bank and see what they say. If thats the case, then i move on, although I think its also a good idea to speak to a realtor and see what they say as well.

In my eyes the order of action steps would be first to contact the bank and see whether or not there would be any ability to secure financing before moving forward, then a realtor, then contractors- does that sound right?

Your project sounds interesting. You are getting some good advice on how to approach it in a typical manner. Here is another suggestion, given where you are. Rochester is a very surprising area - it scores highly as an innovation hub and specifically as a leading center of energy innovation with world-class energy innovation facilities including the Rochester Institute of Technology and University of Rochester's Energy Research Initiative. Why not consider a partnership with one or more of Rochester's energy research facilities to use your build as a test bed to apply small scale innovations to affordable housing? They probably would not be interested at all in someone who just had ideas and no money. But since you have money to invest, they might be interested. Just something to consider if the traditional route does not work.

We bought a house similar to what you suggesting ( it got hit by tornado), we were cheated and lied to by known corporate tortfeasor LibertyMutual insurance. ( if you have Liberty I would suggest you dump that human waste ).

Buying foreclosure - could be a good idea ( depending on the state of the house and the cost). Banks are not commonly selling foreclosures for c/$1. 15% off, or 20% off - yes. If they do most likely they sell from left hand to right hand, to a realtor attorney, or some connection.

Demo and keeping basement is problematic.

1) Expensive - much cheaper to demo entire structure.

2) An old basement is build without drain tile - no perimeter or under the slab drain tile. questionable windows, no egress mandated here. Questionable strength (LOAD), height, very smelly and moldy. Costly to PROPERLY rehab (HINT: spraying the bleach and drylock is not a solution).

3) It is difficult for new structure to accommodate old basement. Esp if you are planning small footprint. An old basement would be large and rectangular. Some would not be up to code...

4) For small footprint spending $17k to have new leveled foundation, with egress windows is worth it. Less considering saving on the demolition.

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I hate to tell you, but I don't know if a woman can be a GC. Don't take it the wrong way but it is the subs who may not give you a time of the day or reasonable price. I have to constantly step in for my wife, to a degree I never expected in 2015.

====> It all depends on opportunity.

It's a big project, and I'm concerned about its long-term success: Chisue's question about whether the neighborhood is going up or down is a valid concern. Even if the houses all "look good", if a large number of houses are heading towards foreclosure, it is a red flag. When this situation occurs, often investors buy up the houses and it becomes a rental neighborhood (we're kind of heading this way in my neighborhood -- not because of foreclosures, but ... well, it's a long-winded answer that really doesn't matter). If the neighborhood goes down, you may find that your house becomes a depreciating asset.

Rather than tear down a house and rebuild from scratch (which sounds like a very expensive option, even if you're looking at small houses), I'd consider one of these two options:

- Buy an RV camper. It's about the same size as a tiny house, but it's mobile, so you're not tied to any neighborhood. They're readily available on the used market and would cost less than any house. Of course, you'll never make a profit selling it, but I'm not sure you'd profit with a tiny house either.

- Buy a duplex, which would give you a small place to live yourself AND some rental income. These sell cheaply, and I think you could have one for the same cost as the tear-down-and-build-up idea -- but in the long run you'd have a more typical property, which would be easier to resell in the future. Also, a bank is more likely to loan you money for a more traditional property like this.

Though it's kind of off-topic, I will echo BrianS's sentiments about Liberty Mutual -- not their insurance, but their mortgage company. When we were first married, we used them for our first house's mortgage, and they were AWFUL. They miscalculated figures at the closing, then several months later demanded more money from us. They collected escrow from us each month, but then didn't pay our insurance and taxes. I would NEVER do business with them again. However, the silver lining is that our experience with them was SO INCREDIBLY NEGATIVE that it made us determined to live frugally, and now we never have to borrow for anything again.

I'm still reading here, interested in the outcome. I failed to note earlier your mention of a number of homes in pre-foreclosure. Don't get too worried by that. People sometimes juggle bills. PRE-foreclosure is miles from any action by a bank -- and people know that.

I've looked into this more and agree it would be more cost effective to just demo completely and then rebuild - including adding a new foundation. Also, i did find out that I would need to run new sewer lines anyway so there's that as well. And in completely rebuilding I would be able to make sure everything is up to code.

As for resell value- maybe it should be- but its not a concern for me. Homes in my current area, or neighboring areas that are wealthier and nicer have similar sized houses (700 - 950 sq ft) either selling for or currently valued at 6 figures. Market indicators strongly estimate an increase in home values and show an upward trend since like 2004. Why there are so many houses that are in pre-foreclosure im not sure of- the only thing i can guess is maybe people took on mortgages when they weren't really ready to. I have noticed the many houses for sale and I found out that when you're in pre-foreclosure you still have the opportunity to avoid foreclosure by paying what you owe and you can do that by selling the house which makes sense why there's a lot of homes in the area for sale- however, I took a drive around today and most of them have "sale pending" signs already. Its a desirable neighborhood and i don't see the area taking a downturn in the future. Plus to build something out in the super-suburbs is going to be way more expensive and even more red tape to go through.

As for an RV - thats really too small which is why i haven't looked into a tiny house on wheels - what are they- like 150 sq ft??? Not to mention I can't park it just anywhere- that would be a huge violation. If i did go that route the only option available to me would be to live in a designated RV park and thats a no-no. I know there are a boat-load of people that have a tiny house on wheels or RV and they like use the back of a family member's property or whatever but as far as i can see those are all people that live in middle or western USA. People whose family own acres of farm land. I dont have that and there's no way you wouldn't be caught/fined breaking the city ordinance by having an RV parked in a regular backyard with you living in it full time.

I currently live in a duplex - the promise of rental income is nice but the cost to upgrade a house up here is just too big when adding on the cost of upgrades and repairs to the kind of mortgage a duplex would run me. I'd be looking at well over $150k for a duplex in my current area in need of repair and if in a nicer area- about double that. I'd be in the red by the time I signed the paperwork.

On the plus side, through additional research I've found some tiny home builders that already have lenders they work with so that a potential buyer can finance a new tiny home so i may go that route. And I will definitely take note of the issues with Liberty Mutual!

While I don't have any advice about demo-ing a house, I do have a lot of experience with tiny houses that might be helpful for you. We have one as our second home, and we had it before having a tiny house was cool. It is technically a park model home - basically it is titled as a RV, but it is on a permanent concrete block foundation, strapped into the ground, and skirted so that it looks like a cottage. It is 399 square feet, plus about 150 sq feet in loft space, and it is awesome.

Not all banks will offer financing on tiny house/park model homes, but I know that US Bank does as well as some credit unions. We use Foremost for insurance and I've been happy with them so far.

https://www.athensparkhomes.com/index.php

The issue is that while you at not care about resale, a bank WILL. The home will have to be able to be appraised for enough to cover the loan amount in order for a loan to be approved. You may have to have a substantial down payment in order to gain a loan.

That is In addition to the existing home being paid off. The existing home is the collateral for the bank for loaning you the purchase amount for the property. It takes s lot of creative financing and a large enough and fancy enough end result for a bank to agree to let you to demolish their collateral and build something els. It's why most infill homes are large homes on small lots. They have to be, in order to make appraisal.

the existing home would be bought outright in cash, as well as the demo. I would be interested in financing only the rebuild and that's only to make sure I don't wipe out my savings entirely because installing the high efficiency systems i'm looking for are kinda costly upfront although I believe the long term savings are worth the upfront cost. I wouldn't be getting a mortgage because the existing home would've been bought in cash and the home to be built would be assessed afterwards to determine property taxes. It'd be either a personal or 'construction' loan. Im still looking into those as well as builders that already have lenders that approve financing for their builds.

Also- thanks Lisaag98 for the info on US Bank and Foremost! Its amazing - the idea of 'tiny' homes has been around for ages, its just trendy now- but i remember being a kid in the Bronx and seeing a lot of houses with little mini houses at the back of the yard- granny flats, in-law suites, and whatever other names they use for them now, and asking my mom if they were big doll houses lol

You really need to talk to the lender. I am not an expert on small house loans so there may be special incentives that you can take advantage of. But I can tell you that typically the lender is going to take the appraised value of the land and home together and loan you a percentage based on that. Some lenders will go as high as 90% of appraised value or 80% of costs. The problem being is that small houses are often upside down on those numbers. Which is an unfortunate side effect of the fact that your appraised value is often set by the price per square of neighboring houses. You should get a bump for new construction, but it not unusual for people to buy land ready to build on, only to find out they need another $50,000 to make the financing work. The hindrance comes from those very expensive systems that all houses must have that I talked about above. I am not saying it can't be done, only that step one is talk to a lender.

As for high efficiency systems, I am a huge fan of solar and similar systems, but you almost have to do it because you want to, and not because of the savings. Often those savings take so long to materialize that they don't make financial sense. Again, I like them, just not for savings.

OK, Let's just say that you have 200K in savings. The existing home and lot are bought for 150k outright. Demo costs 10K. So you have 40K left. You start getting quotes for the new home and they are in the 150K range to build it. (Those green systems cost a lot up front.).

In a traditional 2000 sf build that would loan you 80% of the value of a home, it would be tight, but doable. When the house is only 500 sf, the "as built" appraisal won't support an end value of 150k. It might support 50K. The bank will only loan you 10K. Or, realistically, they won't loan you anything because you don't have enough cash to finance the rest of the build.

Banks are risk averse and will never loan more money to build than the home will appraise for. Small homes cost more to build than they will appraise for. It is a chicken and egg conundrum. The bank won't loan you the build money unless you really don't need it.

bry911 - good points - but you're right i need to talk to a few lenders and see what they say, and take it from there. Live_Wire - the property is selling for less than a grand, local demo & removal quotes for 10-20K. So (pending there's nothing like asbestos to remove) total upfront cost would be less than 25K.

I still need to look into the lenders the specialty builders are already working with and US Bank. There's so much to research!

If your plan is to tear it down, check with your fire department. They could use it for training purpose and you would have to remove things that can't be burnt down such as concrete. It should cost less than hiring a demo company.

If you've got inner city properties selling for less than $1000, I can't imagine there's anyway you can build cheaper than you can buy. $20k just to demo. Easily $200k to build new. And if your neighbors are being sold for $1k, you still only have a $1-2k house.

Also, do some math on your ROI for these high end, "energy efficient" systems. Typically, the smaller the house, the less energy you're using. And when you're investing in an expensive system, you need to save a lot of energy to make up the up front cost. If you're not using much to start with, there's not much to save. You could end up having to replace the system before it ever earns back its up front cost. We hired an environmental consultant to make suggestions and model our energy savings, and we didn't do most of what you're suggesting. And our house is significantly bigger than yours.

Houses are probably not selling for $1,000. Foreclosure actions can be incredibly complicated, and some of the systems used to report transactions are based on transactions being at arms length, so they get misreported, and $1,000 is one of the more common amounts it gets misreported as. This is not to say that it doesn't happen, it does, actually thousands of times every year, but usually from city condemned and owned properties. These houses are typically in very repressed areas that have very high crime and no one wants to deal with the liabilities of owning the property. Banks will typically do anything to avoid these low foreclosures, a foreclosure costs the bank several thousand dollars ($15,000 or so last time I looked). More often than not these properties end up in bank walkaway. The bank just decides to write off the mortgage without foreclosing.

There was a house up the street from me that was reported in the newspaper as being sold for like $3,583 (I don't remember the exact amount but it was under $5,000). The guy who bought it actually paid $400,000. He has no idea where the $3,583 came from.

While this may not be the case in your area this is again a reason to talk to the lender. There is this old saying about sounding too good to be true...

>There was a house up the street from me that was reported in the
newspaper as being sold

>for like $3,583 (I don't remember the exact
amount but it was under $5,000). The guy who

>bought it actually paid
$400,000. He has no idea where the $3,583 came from.

Common bank "fraud" (e.g. legally permitted) everyone should be aware of. Bank will have subsidiary REOSUB. Let's say debtor bought the property for $450k, he owes a bank $250k. If the Bank forecloses on the property and sells it for $400k - the bank will be legally be obligated to pay some money of the proceeds back as the bank made $150k in profit minus foreclosure cost. However if bank sells it to REOSUB (bank itself) for $3,583, bank will take write off nearly $350k, hang the cost of foreclosure on the debtor in the amount of $250k + $100k foreclosure, stuff taxpayer with the tax liability on the loss, and book all profits against REOSUB. Justice "won" - Right!

NEVER ALLOW YOUR PROPERTY TO BE FORECLOSED ON, the shmuck who bought the property here lost the property, lost the interest and the payment toward the principal, will have foreclosure on him with a bank debt collector attempting to extract payments toward $350k "loss". While in this example the bank made up like a bandit with 400k + interest + tax break for a "loss" + possibility of debtor future repayment of "$350k loss" - minus foreclosure cost - minus property.

Thanks for the explanation...Seems like something I should know, now I guess I need to go research that...

Amber: a friend brought up the same point with electric systems saying a small house would already use less energy so it would likely be more worth my while to invest in more energy efficient necessary appliances, like a more efficient fridge, than installing a solar package because it will cost less upfront and get me to my lowest usage so I'm going to look at the actual usage on my utility bills and take it from there.

As for building for less than what I bought for- I would absolutely be paying more for building the new home than I paid for the old one. I already knew that. I'm ok with that. The old home is uninhabitable and not worth fixing, the lot is in a convenient and good location and neighborhood.

Also, the neighborhood doesn't typically have homes for sale for that littlw, that particular home, i researched more and it looks like it was owned by an old couple. One died, the other was foreclosed on. The house has been vacant for a very long time.

Bry: the house is bank owned. It did not sell at auction which is why the bank owns it. I already was in touch with the current bank owner to verify listed sale price, waiting to hear back but the county assessor values the home at less than 50k at this time so there's no way that property would cost me even close to 150k even if the listed price was an error.

Net420: that's a really good idea I never would've thought about that!

Sounds like a great opportunity.

well the person that recently bought it certainly thought so! it wasnt actually for sale for the listed price, but it did sell for way way below market value, something like $20k or so, which is still pretty good. But - i actually got in touch with a local realtor who let me on to a vacant lot that i didnt know about in the area so we have some things to talk about- either way everyone was mega helpful - thanks everyone for your insight, advice, and for pointing things out i didnt think about!