Comments on: Buying Foreclosures Can Be Risky

By: Jacob Christensen

Jacob Christensen — Wed, 12 Aug 2009 19:49:48 +0000

I don’t agree. If we plan and think before we buy, foreclosures is as save as every business.

By: RB @ RichBy30RetireBy40

RB @ RichBy30RetireBy40 — Fri, 31 Jul 2009 06:26:39 +0000

So tempting but so dangerous. Best to look at foreclosures in prime locations, and they do exist.

Rgds, RB

By: My Journey

My Journey — Thu, 30 Jul 2009 00:05:35 +0000

Also there will be a time drag either for financing, title searches, or negotiating with 4 levels within the bank

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Wed, 29 Jul 2009 17:33:11 +0000

Though it sometimes seems everyone is looking for a foreclosure to buy, it really is a venture best left to those who do it for a living, otherwise it can be a real money pit or worse.

Financing is a conundrum. The bank selling the property wants to sell it as is. But if there are issues of safety or livability, you won’t be able to get a new mortgage unless the problems have been cured. If you already own a home and are buying for investment or a flip, the bank won’t want to grant maximum financing. They may require 20% down or more.

Rehabbing is another problem. If you plan on buying a foreclosure then hiring out contractors to do the work it can get really costly. Often times the cosmetic repairs that are undertaken reveal structural problems that can add thousands to the cost. Unless you have the ability to do many/most of the rehab yourself, don’t by a wreck.

Much profit potential, but you’ll have to navigate a minefield to reach it. It’s not an undertaking for the risk adverse!

By: Penny

Penny — Wed, 29 Jul 2009 16:18:03 +0000

Another thing some don’t consider: has the home made the “abandoned property” list (or similar) in the City it’s located within? In my City, being empty with no utilities currently running equals “abandoned”. When you make that list, you must bring the home up to CURRENT code to get a certificate of occupancy. That’s a tall order when the housing stock is mostly 50+ years old.

Just sayin…..

Also: many Cities, in an effort to reduce rentals, have placed moratorium’s on new rental properties. This could also hamper things.

Good luck out there!