Buying a Foreclosure in Hudson Valley. Value or Money Pit?

Hi, I am interested in buying a small country cabin or house in Hudson Valley for about $100k. I see lots of listings for pre-foreclosures and foreclosures. We want to buy a house that needs work but probably can’t devote ourselves to a gut renovation (which we did in Brooklyn, so we have some experience). Are Homepath foreclosures any different or better? If Homepath is asking $200k, could I get perhaps get it with a bid of $100k? Would love to hear from anyone with relevant experience, positive or negative (including owners, brokers, GCs etc). Thank you in advance.

renoishard2

in General Discussion 7 years and 6 months ago

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lindelemony | 7 months ago

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Now there are no problems with paying for all necessary purchases on the Internet. I usually pay for everything through the WestStein payment service, it is very convenient and you can easily get yourself an https://www.weststeincard.com/ online card for payments. Then it is very easy and simple to make payments and no problems will arise.

johnbk | 7 years and 6 months ago

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I did research on foreclosures, preforclosures, and auctions. The best returns would be found in houses that were going to hit the auctions – but those were also in the worst shape. Preforclosures were in much better shape but didn’t offer nearly as much return esp. if a tennant was in the house. Tennants were usually angry, frustrated, confused and would make huge demands; I felt bad for them any time I met one and ruled out that option. Foreclosures are a roll of the dice, the biggest hurdle is convincing a bank to come down in price and that their asset is not worth what they claim it to be worth, you would need to spend money to prove this to them by hiring an appraiser and any other necessary professional.

If you go the auction route you are up against professionals, research the houses listed, check for liens, drive by homes if you can and show up the day of with your cashiers checks.

renoishard2 | 7 years and 6 months ago

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Thanks for sharing your experience. Yes, I’m looking looking only at properties that are vacant and paying all cash. There are definitely a lot of challenges. Not looking to make a big profit in a flip. Just looking to buy something cheaper bc I don’t want to “waste/consume” more capital on a weekend house than I can afford to or is strictly necessary.

johnbk | 7 years and 6 months ago

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I tried to purchase a foreclosure home in brooklyn a few years ago. I learned some things, eg. because the tennant is behind on the mortgage you would assume the are getting evicted right? Wrong. The bank prefers to keep someone in the house instead of vacant. You would also assume that the bank would prefer to have the house off the books or in good standing right? Wrong again. They want the greatest return, there is zero chance you will get them to come down 50%. Maybe if you do all of your work: comparables, research for liens, etc.. you might be able to negotiate a 10% reduction. Remember the bank is already in the red and doesn’t have any incentive to take a further loss.

Prepare to bring a lot of cash to the table, for a 2nd home you will need at least 30% down payment. If it really is in poor condition they might require more or fixes to be made if structural problems, utility problems exist, you can try to negotiate this but the selling bank probably won’t be very flexible. You may also have to pay the tenant to leave, not sure. The one RE agent I used told me 10% cash in a bag to the signing to get the seller to leave.

You can get a deal, but not nearly as much as you think. It’s a lot of work for very little return.

renoishard2 | 7 years and 6 months ago

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It doesn’t seem like there is a lot of buying interest in these Homepath houses. A ton of listings and they seem to be in pretty bad shape. And I think they are usually asking way too much relative to comps that are actually liveable as is. And there’s probably lots of other liens attached to them too. I’ll probably stay away but was fishing for some big success stories to see if I should even bother.

stuyheights | 7 years and 6 months ago

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Homepath is a Fannie Mae owned property. Owner occupants have first chance of these homes. Fannie makes you sign a occupancy disclosure when placing your offer. Most of these properties are priced in line with the market and go to the highest bidder. Extremely unlikely to get a property for 50% of the ask. If the property does not sell in the first 4 weeks (I believe its four weeks-may be eight) then it opens up to investors and 2nd homes.