Major fixer-upper

[Tucros]

Hello. First off, I'd like to say thanks to everyone for all their great advice. I've probably spent 10-12 hours the past couple days reading posts on this site. I'm very excited about buying my first property and recently started prospecting.

I came across a house that's VA owned and right in my area. I drove by yesterday and looked around a bit. Wow. It needs a lot of work. It needs a new fence, has some foundation problems, and it's listed as having termites.

My question is, can these properties be a good deal? Right now it's listed for way too much, and I'm not sure what kind of competition there is for VA/HUD properties. Should I forget about it outright, or do a little more digging and maybe make a low-ball offer?

[Debbie]

Welcome to the Magic Bullets Fambly!

First off, it almost sounds like you have limited knowledge of this property.

If I were you, I would make contact and find out exactly what the deal is. In other words, is it a foreclosure? Is it (Death) estate? Is it REO?

Is it in the MLS? Have you spoken to any of the neighbors (they may know more than what the realtor might not say)?

Try to find out as much as you can. Then get back to us, okay?

So do your homework, young man! :scream:

[Tucros]

Sorry. Youre right, I dont know much about it. I emailed the listing agent and Ill call tomorrow. Ive read a lot but im just now starting to take action and am a little lost.

Thanks for your help and ill post more as soon as I know!

[Debbie]

Never apologize! You're a beginner and we're here to help you out. Once again, never apologize for something you're just learning! :SM065:

[Dan Auito]

You can probably do much better by waiting until a real UNADVERTISED deal comes along. This one having foundation trouble and termites and a fair market price just isn't going to be the best of deals. Keep looking!

[brianb_cobbres]

Just keep in mind that you have to make your profit going into the project. Consider all your hard and soft costs and make an offer that guarantees a reasonable profit at the end.

That said, what is the realistic after repair value, what is the current ask price, and how much to you think it will take to rehab? Factor all that together with financing costs, carrying costs, and profit so you can see what you can offer.

Any project can be a good deal if you do your homework and, of course, if the offer get accepted.

[Dan Auito]

Ancient Chinese secret say: He who buy from desperate man make good deal.

Uncle Sam never seems to be that desperate, their advertising reach usually gets close to market prices.

[Bill W.]

Most of the VA and FHA repo's are priced too high for investors. They also don't take real low ball offers. They also make these properties available to owner occupied buyers first. Investors are only allowed to bid after the property has been advertized for a while. Some investors will try to cheat the system and claim to be owner occupied anyway. DON'T DO IT. IF YOU GET CAUGHT, IT'S FRAUD AND PENALTIES ARE NOT WORTH IT.
Most of the guru's have long ago told their customers that the govt. has deals. This sent flocks of them to the VA and FHA repo sites. Prices went too high.
Occasionally you may find a deal, but these deals will usually be in war zones. Don't do deals in war zones because they are hard to resell. No one wants to buy in a war zone.
There is INTENSE competition for these type properties because they are EASY to find. EASY= no good deals.
I'd also advise that unless you have experience in foundation problems DON'T get into deals with foundation problems in the beginning of your career. There are many easier deals out there.
Look for people with problems who own property with equity.
Problem solvers get paid big. The bigger the problem, the bigger the payday.