Looking At A Foreclosed Property And...?
I am new to real estate investing. I know I am going to be pursuing it, and am looking for my first deal. I was thinking getting a rehab for my first deal to put a little extra cash in my pocket. Anyways here is the story:
I am looking at a foreclosed property and have a couple questions.
This house is for sale for $25,000. It's in a DECENT area. 3 bed/1 bath. 935 sq ft. Ranch, built in 1920. It is assessed at $49,170
As far as I can tell from the assessor web site, this house was bought on 3/31/99 for $30k who immediatly turned around and sold it on contract 4 days later to someone for $56k. Early this year something happened and now it is owned by a Tax Asset Group. There is a tax sale deed on this property. This asset group appears to have paid the $384 that was due and apparently is now in possestion.
My main question is that basically I could buy this house for $25,000 that is appraised at nearly $50k? What is the catch? The picture I can see on the assessors site looks like the house may need a little TLC which I am willing to give it. Does this sound like a good deal? Are there any other questions i should look into or anything else I need to dig further for?
Thanks,
Chase (The newbie rehabber and future landlord)
when the property was sold for 50k, it could have been done with an appraiser who was very aggressive. In MN, there were some mortgage companies, who worked with some realtors and appraisers who artifically increased the house prices. I am not saying this has happened to you, but it is a possibility. Also, the house could have been in GREAT shape for 50K, but now that it will cost 30k to repair, they are selling it for 25k.
Just a few thoughts
Derek
Well as far as artificially inflating the prices I could see that but the guy in essence "flipped" the property from $33,000 to $56,000 on contract 4 days later. He owns seven or so other properties so I can tell he is an investor. I guess it is a possibility that there would be a few repairs. When you buy from a mortgage company or a tax asset LLC is it usually at a better deal?
Hey,
Maybe I missed it, but it sounds like you have only seen a picture of the house.
You can judge NOTHING about a house without seeing it. It doesn't matter what the difference between the "appraised" value and the asking price.
You have to talk to someone first (to get as much info as you can) and then see the house. THEN you should start thinking about "is it a good deal or not".
2 words
Lead
Paint
It is important to get inside and do your own comps. It may have been over appraised as has been said. In my market assessed value means nothing. I just bought a house that appraised for 61K last year for 30K....the outside is picture perfect....the inside needs 15K in work.(just an example)