Posted by Gene on January 29, 2008 at 14:08:37:
One factor you didn’t adress is if you think prices are going to keep going down. If you think they are…why jump in early?
Gene
Looking for advice!!! - Posted by MJ
Posted by MJ on January 29, 2008 at 13:05:01:
My wife and I purchased new construction in 2005 at market peak with intent on staying 2 yrs and then reselling. We are located right outside Ann Arbor, MI and the neighborhood has been hit hard with foreclosures. We purchased for $242k and put about $30k into it (deck, landscape, stainless appliances, crown molding, finished basement). The foreclosures are listed between $169-210 in which some of these were purchased new for mid $300k. We know now that we are going to stay in our house for awhile, but would it make sense to purchase one of these foreclosures if we could get it rented out? Here are the details:
4 bedroom 3.5 bath, 2600 sq ft w/ additional 1080 sq ft of finished basement, purchased new from the builder in 2004 for $345k. We know the owners and they put another $40k in upgrades while they lived in it. The husband took a job out of state and they tried to sell the house for almost a year before finding renters. The listed price started at $325k, then $299k, then $269k, then $255k. They pulled it off the market a year ago when they signed tennants for a 1 yr lease and those tennants only paid the first 3 months and haven’t paid the last 7 months rent. Now the house is listed by an Agent for $169k and it states “Purchase subject to Bank Approval of Short Sale”. I’m not too familiar with the short sale process, but it seems like a deal to me in the $160’s. We have excellent credit and 4 other cash flowing rentals so it shouldn’t be an issue for us to acquire the property. The issue will be in finding a tennant that would potentially sign a 3-5 year lease option that gives us a little cash flow and also enough for a down payment builder for the tennants if they exercise the option to purchase. I guess my logic for wanting to do something like this would be that if and when I’m able to sell my house for anything near what I have into it… this one should have a decent margin.
I’m sure I’m missing things here and that’s why I’m looking for any advice/help in making sure I cover all bases.
Thanks,
MJ