Buying foreclosed home instead of renting - Chicagoland Sportbikes
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post #1 of 18 (permalink) Old 12-11-2011, 11:25 AM Thread Starter
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Buying foreclosed home instead of renting

Rather than renting an apartment, I'm considering buying a cheap foreclosed single family house in the burbs.

I'm not too concerned about the aesthetics of the house as long as it is built well and is located in a relatively convenient area. I can renovate it later.

If you have any kind of experience with this, please feel free to share your thoughts, tips, pros/cons.

Is it better to go with an agent or search for properties online by yourself?

Thanks
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post #2 of 18 (permalink) Old 12-11-2011, 11:35 AM

 
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These homes often have hidden costs and require improvements to meet city occupancy codes.

Along with past bills for the home such as taxes or city services.

Most of the homes will not qualify for FHA loans meaning you'll need CASH.

Once the home passes code you might be able to get a loan on equity.

The local community collages offer classes in this regard I took several, but never felt that being a land lord was my cup of tea.

Good luck.

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post #3 of 18 (permalink) Old 12-11-2011, 11:43 AM
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+1 on checking for hidden costs. Often the property will have additional leans against it, outstanding taxes, other home equity loans. The property is typically bundled with its debt, and sold for $0.25 on the dollar to pass off that debt to the new owner.

Get a lawyer that knows what he's doing to write up the offer to purchase. The IL standard contract is worthless, and more than likely, the bank will push their own contract which protects them.
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post #4 of 18 (permalink) Old 12-11-2011, 11:43 AM
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Its not a bad idea , but check the taxes on the property . Cook county does not take into account foreclosed properties . If you buy a house for 150k that sold for 300k prior to being foreclosed , they will still assess it at the 300k sale price .Take in account the taxes and insurance .Sometimes the taxes are $700 a month on a simple house .

Make sure it does not have any stop work order stickers , this would require you getting permits before moving in . Have the plumbing checked , most of the time these houses do get winterized , but you never know . I would recommend a home inspection so that you wont be surprised . If you are not paying cash , the bank will most likely have you do this , FHA will for sure. It has to be habitable to be financed .

Ask me if you have any specific questions .
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post #5 of 18 (permalink) Old 12-11-2011, 11:50 AM
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Also have the hvac system checked, you don't want to move in and find out you have a cracked heat exchanger and are pumping the house full of carbon monoxide. I do foreclosed home hvac inspections for $100 flat rate fee.




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post #6 of 18 (permalink) Old 12-11-2011, 12:07 PM
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Also have the hvac system checked, you don't want to move in and find out you have a cracked heat exchanger and are pumping the house full of carbon monoxide. I do foreclosed home hvac inspections for $100 flat rate fee.
+1. Get a full inspection even though they won't fix anything for you. It is best to know exactly what you are getting. You won't necessarily need cash.

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post #7 of 18 (permalink) Old 12-11-2011, 12:12 PM
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Quote:
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Most of the homes will not qualify for FHA loans meaning you'll need CASH.

There are options aside from FHA.


The paperwork on foreclosure/short sales often takes months longer than a typical house purchase, which takes quite a while anyway.

IMHO, juice ain't worth the squeeze.

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post #8 of 18 (permalink) Old 12-11-2011, 01:08 PM
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Don't forget to look at foreclosed condos. I have seen several around here that were ready to move in for less than 50k.
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post #9 of 18 (permalink) Old 12-11-2011, 01:10 PM
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Foreclosures, especially in today's market where they're everywhere, are awesome deals and can go really smoothly. Find a reputable agent who knows the area well and do your research. As others mentioned give the home a very thorough inspection to check for problems. Some of these places are real money pits.

Bank owned foreclosures can close the same day an offer is made. Short sales are more typically fraught with long term sale issues.

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post #10 of 18 (permalink) Old 12-12-2011, 06:58 AM
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Some of the foreclosre rules are really bent these days.....


forclosed homes used to often be distressed due to finances for a long time.... that's where the extra liens and poor condition comments come from.


Right now, a lot of properties are foreclosed but are fine otherwise .... great supply.



The inspection comment is right on.

The lean / title investigation comment is right on.


There are good opportunities out there.


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post #11 of 18 (permalink) Old 12-12-2011, 07:54 AM
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lean
Verb: Be in or move into a sloping position: "he leaned back in his chair".
Noun: 1.A deviation from the perpendicular; an inclination. 2.The lean part of meat.
Adjective: (of a person or animal) Thin, esp. healthily so; having no superfluous fat.


lien
Noun: A right to keep property belonging to another person until a debt is paid.
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post #12 of 18 (permalink) Old 12-12-2011, 08:04 AM
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lean
Verb: Be in or move into a sloping position: "he leaned back in his chair".
Noun: 1.A deviation from the perpendicular; an inclination. 2.The lean part of meat.
Adjective: (of a person or animal) Thin, esp. healthily so; having no superfluous fat.


lien
Noun: A right to keep property belonging to another person until a debt is paid.


Get A Life


Tom

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post #13 of 18 (permalink) Old 12-12-2011, 08:14 AM Thread Starter
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This is excellent advice. Thank you all.

Once I get the ball rolling, I'll reach out for your services and advice.
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post #14 of 18 (permalink) Old 12-12-2011, 08:19 AM
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Quote:
Originally Posted by BLARNEY View Post
Get A Life


Tom
get a dictionary
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post #15 of 18 (permalink) Old 12-12-2011, 08:54 AM
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get a dictionary

http://www.urbandictionary.com/defin...pelling%20nazi


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post #16 of 18 (permalink) Old 12-12-2011, 09:18 AM
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incorrect spelling doesn't bother me.
this isn't a case of incorrect spelling, it's a different word altogether, with a different fucking pronunciation.
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post #17 of 18 (permalink) Old 12-13-2011, 09:00 AM
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"These homes often have hidden costs and require improvements to meet city occupancy codes.

Along with past bills for the home such as taxes or city services.

Most of the homes will not qualify for FHA loans meaning you'll need CASH.

Once the home passes code you might be able to get a loan on equity."


fact
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post #18 of 18 (permalink) Old 12-13-2011, 09:04 AM
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keep in mind too that once your purchase a home or condo, you can plan on staying there for some time. as you know, this market is rough. and if you make the comittment of buying, plan on being there for around 4-5 years...minimum...IMO
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