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One More Time

11th January 2010


After the nightmare we experienced with the last Sheriff’s auction we decided to go a different route. Since we had established a relationship with a real estate agent we decided to see what she could do for us. We began looking at HUD and Fannie Mae properties for our next deal. Our agent placed bids on a half dozen promising properties for us. Unfortunately for us as investors, our bids we were always placed behind owner occupant bids; even though we had high bid several times. We learned a lot about bidding on HUD and Fannie Mae properties. I could do an article on each property we bid on, but that will have to wait for now. We eventually went with  a bank owned (REO) just a few block away from one of the HUD house we were bidding on.

The house had been on the market for a little over 6 months. The interior was in bad shape, a new roof would be required, and once again there were noticeable foundation settling problems. In spite of the defects there was a lot going for this place.  For a small house (1050 square feet) it was laid out very nicely. It had 3 decent size  bedrooms with a half bath in the master. The kitchen was small, but by removing the wall between the kitchen and living room, we could create a nice open layout. The exterior was full brick with some interesting architectural details not found in other houses in the neighborhood. We later discovered that the home was the neighborhood builder’s showcase model.

Originally, the bank was asking $74,000, but by the time we placed our offer the asking price was reduced were at 57k. We began with an offer of 50,000; they countered at 55. We countered their offer at 53, they came back at 54.5. We held firm and a day later they accepted our 53,000. We took possession the end of May.

Within two weeks after we had possession we had seven foundation piers installed and had started on the roof.  The roof was a little worse off than expected. About half of the  decking needed to be replaced, and the style of roof required a lot more materials than anticipated, but. We had the entire exterior of the place finished in less than a month. The foundation and roof were sound, decayed wood around the fascia and sofit were replaced and the entire exterior was painted.  The interior was next.

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