REO Next Door
9 years ago
last modified: 9 years ago
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- 9 years ago
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Comments (1)Move 20 miles away--problem solved! neat, eh? RJ...See MorePossibly buying an older home to rent, advice..
Comments (15)Worthy made the real point. My uncle was also a residential landlord his whole life. His advice to me was not to worry about the property. First, find a good renter and get the house for him. Being a landlord is like any other business. You can't just expect to put an ad in a paper then put the renter who answers it in the house and expect good results. A good analogy is someone who starts a small 'boutique' type store. They 'do the work' plowing through trade magazines and web sites and go to trade shows to buy their merchandise. The store flourishes because buyers know they can find unique gifts unavailable anywhere else (because of the owner's hard work). Someone with more money than sense sees the booming business and buys it. They think because they bought something successful that they now have a free ride and hook up with several jobbers to stock the store while they sit back and work the register. 6 months later they're bankrupt as people stop buying, disgusted with the stale merchandise. The renter is the real asset. If you 'do the work', you can find lots of good ones out there. Just don't expect the 'work' to be placing an ad... I suspect your 12K figure for freshing up the house to be unrealistic, even if you do the work yourself...which your talk of contractors indicates that's not feasible. I usually budget 20K (doing most myself) to be able to present an excellent property to my hand-picked tenant. I have no problem leaving the house empty 6 months if necessary to get a tenant I feel good about...I NEVER post a 'for rent' sign. Not the way to get good tenants..again, YOU have to 'do the work'. If having a rental sitting empty is going to seriously affect you financially or emotionally, you probably should't be a landlord. That's the serious truth. When you have a good tenant, keep in touch with them, stop by and visit now and then, bring some beer/wine if they like it. Buy them a fruit basket at Christmas. If they fall onto temporary hard times, cut them a break. If you picked a good tenant, you know it's only a temporary setback for them and they'll be back on track. Letting them be a little short one month won't kill you since they'll bounce back. If their life really goes south, don't hold their feet to the fire on their lease. Let them out and give them back their deposit. If you 'did the work' selecting them, the house won't be trashed and minimal work will get it ready for the next tenant. Remember all the advantages you're getting as a landlord (IRS depreciation, deduction for property tax, loan interest deduction, the appeciation of the property value)... all made possible by your good renter. Like worthy said, he's the most valuable part of the deal....See MoreAppreciate an explanation of REO auction
Comments (3)Maybe this can help - There are a few types of auction and need to figure out which stage this property is in - REO auction #1 - the bank foreclosed on OwnerA for x amount. The bank has taken care of liens, etc. etc. and simply wants to sell all rights to the property for X+Y so they simply wish to recoup their loan & foreclosure cost. NOTE - In the past this was less than the property value so it was a deal however, now with upside-down mortgage this gets tricky which explains why their market value keeps decreasing as the person defining price is probably 20 states away. REO Auction #2 - it has been listed with an agent for a while (so bank owns property) and wants to stop the bleeding. So they sell it in a general auction allowing people to bid on it competitively. This attracts more investors/flippers and hope they can get x - #%? This won't happen unless the property has been sitting for a while. Next step, they will find a different RE agent or relist under different conditions. How to tell the difference? Find your local paper which list the Court or Public Notices and if you find/see the property Auction #1 will show Wells F vs. Owner A in the amount of $X which is a legal notice. However, Auction #2 will show has a general auction sell with multiple listings and offerings in the same ad....See MoreREO's used as comps?
Comments (7)More food for thought regarding appraisals.. Foreclosures weigh on home appraisals By ALEX VEIGA, AP Real Estate Writer Jan 3, 2010 LOS ANGELES �" It wasn't the first time that Katherine Scheri ruined a real estate agent's day with a low property appraisal. Scheri, a real estate appraiser, had sized up a three-bedroom, two-bath house in Santa Ana, Calif., for $30,000 less than what the buyers offered to pay. A typical deal-killer for a seller. The agent urged the lender to force Scheri to consider several other properties that could back up the original $310,000 sale price. Then he tried good old-fashioned guilt, telling Scheri her appraisal was going to ruin the buyers' shot at the American Dream. "That's what he laid on me," Scheri recalled. "And I said, 'Don't you care they could be potentially spending $30,000 too much for a house?" Across the country, agents and homebuilders are complaining too many appraisals are coming in low, scuttling deals. The National Association of Realtors says nearly one in four of its members has reported clients losing a sale due to botched appraisals. The National Association of Home Builders, meanwhile, said low appraisals were sinking a quarter of all new home sales and argues it's not fair to compare distressed properties to brand-new homes. And that gets to the heart of the problem. Roughly 40 percent of all home sales this year were foreclosures or short sales, meaning the property sold for less than the mortgage. In some markets, like Las Vegas and Phoenix, they've hit more than 50 percent. Appraisers determine the value of a property by looking at recent sales of comparable homes. They take an apples-to-apples approach, excluding or making adjustments for certain features, such as a swimming pool or finished basement. And generally, a foreclosure isn't used as a comparison for a standard sale. But in some areas, appraisers like Scheri contend they are only sizing up homes according to the reality of the market, though they concede its becoming increasingly harder pinpoint what a home is worth. The Joint Center for Housing Studies examined home sales over 20 years in Massachusetts and found that a foreclosure within less than 100 yards of a home lowers the price of that home by 1 percent. A link that might be useful: abcnews.go.com/Business/wireStory?id=9468512...See More- 9 years ago
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