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Thread: How to buy a real estate in US?
03-26-2009, 01:54 AM #1
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How to buy a real estate in US?
I am interested in buying a real estate in US as an ivestment and I heard something about HUD or foreclosure homes for sale. We watched a program on TV and apparently you can buy a place under $10,000. Is it for real? Does someone knows or have any infromation how it works.
03-26-2009, 10:23 AM #2
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If you saw a TV infomercial, do not give it too much credit. There are tons of books on real estate investing that you can look into. I personally like [ame="http://www.amazon.com/exec/obidos/search-handle-url/ref=ntt_athr_dp_sr_1?_encoding=UTF8&search-type=ss&index=books&field-author=Robert%20Irwin"]Robert Irwin[/ame]'s books. (On real estate, not the batman books...diff author)
03-26-2009, 11:09 AM #3
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be very careful with foreclosure homes....i have purchased 14 of them..(some at the sheriff sale at the courthouse and sometimes i would contact/ or the bank would contact me and we would arrange for a private sale afterwords)....
the thing with foreclosure is they are sold 'as-is'....most times you cannot inspect the property beforehand...(sometimes the occupants are still in the property...) we have had to have the sheriff physically remove people after the sale (i can't begin to tell you what a person will do to a property they have 24 hrs to get out of)....by law you could have them out within 5 mins of your purchase but we always gave the people a few days (even though they KNEW when the sale was and KNEW to be moved by then)...some won't go....one lady even had a garden tilled in her backyard 3 days before the sale...(don't even know what she was thinking)....
if the home is vacant we had a special 'arrangement' with the sheriffs dept to allow us to 'break' into the home and inspect it...by law...that is not 'allowed' either....but our local sheriff's dept KNEW we were serious buyers and the chances were good that we might pick up that particular property...(they don't like or want empties either)....i don't know if you can get a prior arrangement but i do believe its a must... (we then knew what kind of money it was going to take to put this property back together and that was a basis for our bid at the sales)....
you can pick up decent properties at excellent prices if you do your homework....but i would not get involved with any 'late-night infomurcial' for guidance or assistance....their money is made when you buy their programs.... greebo is right...pick up some books on the subject and give the subject some serious studying.... if you are thinking of 'flipping'..forget it...not in this market....by the time you do the repairs...list it...pay the fees (not to mention you will be responsible for property taxes & ins while you own it...and many a home has back property taxes due too and you will have the short-term gains due for any profit)....you have to be prepared to 'hold' the home until the market shifts and you can get a 'decent' return for the sale....meaning landlord....can you stomach it....can you afford to pay for the house if it is empty....(an example...in normal times in our market we usually have the new tenants trying to move in the front door as the former tenants are trying to move out the back) when the economy tanked people were out of money...they started moving back in with family, dbling up with others...we sat with 5 empty rentals for 8 weeks... that's 5 mtg's due each month...because it was winter the heat had to be kept on to keep pipes from freezing...that's 5 utility bills.....it CAN get quite expensive VERY quickly.... thank goodness we are back to a 'full-house' now....
if you are thinking for your own personal residence...you can make out like a bandit....
another very important consideration is you are going to need to always check on any leins on the property...while most are taken care of thru the foreclosure any Gov't leins placed on the property become the new owners burden...these leins are NOT forgiven and you will be required to pay them.... they could amount to thousands and thousands and sometimes more of dollars....
every home that goes thru the foreclosure process by law must be advertised 3 times in the paper of the county that it resides in...you could start by watching the paper (don't pay for 'foreclosure lists') they are free every day in the paper....they will set a date for the sale and you must be at the courthouse promptly at that time....be prepared with your offer amount and a 'representative' for the property will be their with theirs....the rep gives the first bid (or the sheriff tells you what it is)...then you have to out-bid that offer....(we usually bid $1 more)...at that point anyone on the floor can offer a bid and it can become a bidding war....don't get caught up in it...you must know what your top dollar is and if it goes over...let the property go...there will be tons more coming down the pipe.... sometimes we were the only bidders on a particular property (us and the bank...) other times it was a knock-down drag-out war...if the bank is the only one bidding they will offer one offer and that is it...they do not try to out-bid you....your bid over their only offer will buy the property....i kept a real-estate agent on my team (lawyer,banker,taxman & RE agent) and each property that we were considering she would go with us on the 'break-in' and do an assessment of what the property currently was worth and what approximate value would bring on a sale....so i did not go into the sale 'blind'....you can also find out that the amount owed on the home is to the bank by either the listing in the paper (some will list...others no)...if not check the public records at the courthouse in the county the home is located in...but keep in mind that that usually is NOT the amount the bank will offer for the home...we have seen some bank offers that were double the amount of the amount owed and some others they basically just wanted to re-coup a few dollars for....(ex: $40,000 owed...bank offered $60,000...house worth approx $100,000) bank got that one back...no bidders.... ($60,000 owed...bank offers $40,000...you offer $40,001....house worth $100,000....you bought yourself a house)....there seemed to be no rhyme or reason as to what the banks bid would start at.....
be prepared to pay for the property at once...you cannot bid on a property and then try to secure the financing...you must have a way to pay for the property on the spot (or sometimes within 24 hrs)....we kept a open line with the bank and when i bought a property (one day i bought 2)....i would go directly to the bank and get a check and take it right back to the courthouse....(dh used to say..why can you be like every other wife and come home and tell me you bought 2 new skirts...instead of 2 HOUSES>....)lol....
all in all..its not quite as easy as you see on the tv...but it doesn't have to be super difficult either if you know what you are doing... i would suggest you find someone in your area that can 'mentor' you...someone already doing it....if you don't know anyone check with places where a person involved with this kind of work would frequent...(home imp stores, utility co's) they may not give out names and numbers but you could leave yours and ask if they could pass it on to have the individual contact you....
i personally have no experience with HUD homes as we kept strictly to the foreclosures....maybe someone here has a little more experience....but be careful with that process also....
whatever you decide good luck...it can sometimes be a very bumpy road and you beat your head against the wall and say ...why, why why ????
Last edited by sabrelvssammy; 03-26-2009 at 11:25 AM.
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