HUD forclosures

[REIaddicted]

What a house!
I recently found a HUD foreclosure on a rock and brick home. It has been foreclosed on 2x in the last 3 yr. I know this because I saw it the first time around.

This is what I know:

3 bedroom 1 bath, unfinished basement (huge)
Built in 1921 rock and brick house
Nice front porch with rock pillars
Detached 2 car garage
Garage has a brand new 1 bed apt that recent investor never got the chance to rent out.
Lot size is deep and wide (about 4 city lots)
New roof

Numbers

HUD wants $62,000
FMV as is about $75,000 (as is)
After additions FMV would be about $92,000

Now, If I were to put about $10,000 in to it
Converting the bottom part of the garage in to another apt,
Painting everything,
Lay some cheap carpet
Add a second bathroom to the house

Rent top apt out for (low balls here) $375
Bottom apt $375
House $475
These are low ball rent it out NOW prices

Tidbits:
New housing 1 block away (guy is putting in about 10 houses)
Across the street from a church
Across the street is a day care
Major factory 3 blocks away (one of the largest employers here)
2 universities within 1 miles depending on which direction
1/4 mile from major streets
2 blocks from elemetry school
With many choices in elem., middle and high scl. The house is zoned in the better schools area
Bus stop is very close

What I need to find out:
1. Why this house has been in foreclosure so many times in the last 3 yr.
2. If the electrical work is up to county code
3. If the plumbing is up to county code
4. If I buy this house on a first time homebuyer, I would have to live there for 2 yr. (I think) so what programs does HUD have for first time homeowners with bad credit?
5. If I don't live there, what kind of loan could I get? What would the loan cost?
6. After running all the numbers, would I want to live there while renovating (this way I live rent free with tenants paying the morg)
7. How long would I need to hold on to the property to establish a great rental record so I could sell?
8. How much will the property increase in value with all the building going on?
9. perhaps this a keeper?




These are just some of the questions I have. So, if you all have research links for me... Please let me know
As you can see, this would not be a fast flip, it may have some potential...

Michelle perhaps you can expand on the financing end?

Ok, folks, let's see what we can do with this one. I am having a deal withdrawal! LOL :SM076:

[Dan Auito]

Looks good upon initial stats Lisa, I would check with planning and zoning first thing to see if it is R2 zoned multi-family or you'll run into trouble on that note, I wonder why someone hasn't subdivided and sold off the additional lots by now?

Have the county/city building inspector do a walk through with you noting any plumbing/electric or other violations too!

HUD only requires one year occupancy and if life circumstances change and you maintain your payments then you could move out sooner, I received orders 3 months after closing on a HUD owner occupied deal and moved three months later, kept the home for 7 years.

If you didn't live there then you go lower on the ladder of preferred buyers and you'll pay an extra point on your interest rate as an investor.

It pays to live on site while you affect repairs but you can drive yourself and everyone else crazy in the process so you have to way the intangibles on this.
As soon as you have solid annual leases and good tenants in place backed by thorough credit report checks applications and deposits you should be able to sell.

What is the gross rent multiplier for the area? lets use 7 x annual rent as a pretty middle of the road math factor. (when you buy it, it would probably be a 5. So $1225mo rents x 12 months= $14,700 annual rents x GRM of 7 = $102,900. What are homes going for in the surrounding area? Yep this could be a keeper, as it will probably cash flow when all is said and done.

P.S.Folks, just in case that HUD title caught your attention.

Here is a list for you to begin finding your own HUD home to fix up!
HUD is a great place to start finding foreclosures in your state.

Alabama http://www.hud.gov/local/index.cfm?state=al
Alaska http://www.hud.gov/local/index.cfm?state=ak
Arizona http://www.hud.gov/local/index.cfm?state=az
Arkansas http://www.hud.gov/local/index.cfm?state=ar
California http://www.hud.gov/local/index.cfm?state=ca
Colorado http://www.hud.gov/local/index.cfm?state=co
Connecticut http://www.hud.gov/local/index.cfm?state=ct
Delaware http://www.hud.gov/local/index.cfm?state=de
District of Columbia http://www.hud.gov/local/index.cfm?state=dc
Florida http://www.hud.gov/local/index.cfm?state=fl
Georgia http://www.hud.gov/local/index.cfm?state=ga
Hawaii http://www.hud.gov/local/index.cfm?state=hi
Idaho http://www.hud.gov/local/index.cfm?state=id
Illinois http://www.hud.gov/local/index.cfm?state=il
Indiana http://www.hud.gov/local/index.cfm?state=in
Iowa http://www.hud.gov/local/index.cfm?state=ia
Kansas http://www.hud.gov/local/index.cfm?state=ks
Kentucky http://www.hud.gov/local/index.cfm?state=ky
Louisiana http://www.hud.gov/local/index.cfm?state=la
Maine http://www.hud.gov/local/index.cfm?state=me
Maryland http://www.hud.gov/local/index.cfm?state=md
Massachusetts http://www.hud.gov/local/index.cfm?state=ma
Michigan http://www.hud.gov/local/index.cfm?state=mi
Minnesota http://www.hud.gov/local/index.cfm?state=mn
Mississippi http://www.hud.gov/local/index.cfm?state=ms
Missouri http://www.hud.gov/local/index.cfm?state=mo
Montana http://www.hud.gov/local/index.cfm?state=mt
Nebraska http://www.hud.gov/local/index.cfm?state=ne
Nevada http://www.hud.gov/local/index.cfm?state=nv
New Hampshire http://www.hud.gov/local/index.cfm?state=nh
New Jersey http://www.hud.gov/local/index.cfm?state=nj
New Mexico http://www.hud.gov/local/index.cfm?state=nm
New York http://www.hud.gov/local/index.cfm?state=ny
North Carolina http://www.hud.gov/local/index.cfm?state=nc
North Dakota http://www.hud.gov/local/index.cfm?state=nd
Ohio * http://www.hud.gov/local/index.cfm?state=oh
Oklahoma http://www.hud.gov/local/index.cfm?state=ok
Oregon http://www.hud.gov/local/index.cfm?state=or
Pennsylvania http://www.hud.gov/local/index.cfm?state=pa
Puerto Rico/U.S. Virgin Islands
http://www.hud.gov/local/index.cfm?state=pr-vi
Rhode Island http://www.hud.gov/local/index.cfm?state=ri
South Carolina http://www.hud.gov/local/index.cfm?state=sc
South Dakota http://www.hud.gov/local/index.cfm?state=sd
Tennessee http://www.hud.gov/local/index.cfm?state=tn
Texas http://www.hud.gov/local/index.cfm?state=tx
Utah http://www.hud.gov/local/index.cfm?state=ut
Vermont http://www.hud.gov/local/index.cfm?state=vt
Virginia http://www.hud.gov/local/index.cfm?state=va
Washington http://www.hud.gov/local/index.cfm?state=wa
West Virginia http://www.hud.gov/local/index.cfm?state=wv
Wisconsin http://www.hud.gov/local/index.cfm?state=wi
Wyoming http://www.hud.gov/local/index.cfm?state=wy
:beerchug:

[REIaddicted]

Thanks for the reply Dan. Calling the county will be on my list of things I need to do first thing Monday.

I believe this will be a keeper if things are up to code.... I will still have to figure out the financing part.

To answer your question on subdividing the lots... The house and garage are on the front part of the lots leaving the additional lots in back. Their is lots of mature trees covering the back lots. So I am guessing they had a thing about tearing down the trees.....

Lisa

[invest.realestate]

what is a gross rent multiplyer? Does it vary from location to location? thanks. dave