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Buying bargains
I used to have a couple of clients that had me scout out houses for them to fix and flip.
To get the best bargain never buy For Sale By Owner. They want to pay off the mortgage, usually that's close to full market value.
Same thing buying at foreclosure sale or making a distressed owner an offer.
Cheapest properties are tax sale properties. But many places have few for auction and many buyers bidding up the property. Where I live, there's plenty of houses at auction. Got one client 2 houses for $17,000. He lived in one for 3 years while working on the other. Sold #1 for $24,000, then moved into #2. He be buying more but his drug habit again got the best of him. He used to be homeless. Lived in a dumpster. After he cleaned up his act, his family loaned him the buy money.
After tax sales, buy properties after the foreclosure. Before the foreclosure the cheapest are short-sales, where the bank will take less than the mortgage, let the homeowner live there to keep the property up, in return for a moving payment if the house is undamaged. But the rising market short sales are few.
Buy after the foreclosure. Recent house was sold at foreclosure for $81,000. Bank then listed it at $51,000. Dropped the price to $44,0000. Sold for probably less than that. Looked at it. Needs $50,000 in repairs. Probably get $900 rent, quiet neighborhood. 2 bedroom on 1/2 acre.
Another house was appraised at $150,000. 3 bedroom on 1 acre same neighborhood. Probably needed $20,000 in repairs plus new septic tank & laterals. Bank asked $79,000 the $65,000. Ended up on Auction.com selling for $22,500. To buy from the owner pre-foreclosure would have cost about $90,000. The bank did a cleanout, some repairs and interior painting. Never saw that before. They usually just sell as-is
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