Considering buying a foreclosed house

[allrider]

A lot of good advice here.

I would add an Agent with specific experience working with investors that buy REO's and foreclosures will help. Check to see if you qualify for programs with low down pmt and rehab loans. It could save you quite a bit.

Best of luck

 

[TomInPA]

I saw a few Homeowner warranty posts at the beginning of this thread. In a REO sale, there won't be a HOW option. I just thought I'd say I beat the odds and got a brand new full system whole house air conditioning system and power ventilated hot water heater out of mine. The systems were unrepairable, and were replaced quickly and without a lot of hassle. I had some costs that were not covered, but saved thousands over having to pay out of pocket.

I considered foreclosed real estate during the downturn. We bought a house in 2010 when a lot were on the market. It's a complicated market that favors the cash buyer and offers no assurance of success. You can spend a lot of time, effort and money and come away empty-handed. We bought conventional and made some money on the back end. My impression of the California market right now is that it is relatively high and risky. The valley areas (non-prime real estate) are still prone to significant drops in value, and I see appreciation seen over the last couple years slowing and reversing.

If it was me, I'd take advantage of the great opportunities to rent. Consider you can rent a house valued at $400 -500+K for under $2500 per month, and the false economy of sinking your own money in that market is quickly apparent. You can rent more house than your can afford to buy, and your risk is the amount of a deposit. As long as that is the case, I'm out. California real estate has made a few people a lot of money, while a lot of people have lost their entire investment. The risk is unlike anywhere else.

If you decide to live in Tracy, you need to learn about Patterson Pass Road for the commute.

 

[SFCJCA]

The best source of knowledge for my real estate investing has been BiggerPockets.com. It's a great community and very willing to share experience and knowledge - much like FJRForum.

 

[0Face]

I have to say that when I saw the topic, I was worried. I'm also a Realtor and deal with all this crap daily. Every time I think I've seen it all, somebody finds something new to complicate things even further. The advice given here is extraordinarily spot on. The only thing I would add is Check, double check, then re-check, and triple check. But most importantly, if it doesn't feel right, it isn't.

 

[bikerskier]

We can add info to this subject forever, but a Buyer needs to know that the new owner, the bank, does not follow the rules of RE in your state or for that matter anywhere. Timelines that you may write into your offer mean zilch to the bank and they will take all the time they want to decide when they want YOU to jump through a hoop. Have fun, if anyone wants to see the information I have gathered to inform and hopefully protect my Buyers, please PM me. Ralph