How many times have you heard.. "Location, Location, Location!???"
Well here is another prime example. You as an investor should always be looking for the "worst house on the block". These are the homes that can be fixed up and become a nice source of pride and profit. The key to this method of investing is that we know we are going to inherit "deferred maintenance" issues. This is not a bad thing. The house that needs work is the house that does not sell on curb appeal. It sells at a discount because there is work to be done and most buyers are looking for a home that is "move-in ready". This one is going to auction and has never been listed since the foreclosure began.
It is a fixer in a great spot, surrounded by nicer homes, and is set to go to auction tomorrow. Market value (if turnkey) is around $1,075,837.00... This place is not exactly that. But the amount owed on the loan is just $600,982.00...
$400,000.00 in equity would give me quite a bit of leeway in my rehab costs. I could customize and be creative... or I would simple bring in a clean-up crew on this one and do an "as-is" sale and pocket at least $100,000.00 and let the new owner customize it to his or her tastes. Those of you who are contractors know that you can easily take a house that is walking distance from 2nd Street in Belmont Shore and make it a showplace. This one is "Pristine" as one of my realtor friends likes to say.
You just may be the only bidder. Wouldn't that be a great way to start off your holidays?