We Buy Houses

admin — Sat, 13 Mar 2010 22:31:23 +0000

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admin — Sat, 13 Mar 2010 01:35:12 +0000

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Help me determine how much to spend for a rehab investment. My wife doesnt belive we can buy homes this cheap!?

admin — Fri, 12 Mar 2010 23:24:17 +0000

Someone help me please; my wife doesn’t believe that I can make this happen!!!
Scenario:
Homeowner owes $62,000 on a property that is worth $65,000 in a slow market. This homeowner is going through a divorce and has been trying to sell this property for over a year now. Comps prove that there is a propensity to sell homes in this area. I’m a prospective investor and I know the house has the following severe damages that I consider to be haggling points: Five layers of shingles with spots leaking into house. In addition, there’s water damage in various areas on the ceiling including mold. It has had a cracked foundation that has been jacked up (or whatever else they do) and put under a 15 year transferable warranty. Furthermore, the house is in need of updates and a few renovations; all totaling an approximate amount of $15,000 in repairs. After considering all cost associated, (repairs, fees and many other cost factors), I realized that as an investor I need to get the house at around $40,000 or less. I also realize that it would be difficult for a homeowner, if not impossible, to get financed with the current condition of the property. Once the property goes through the banks underwriting department, it would be declined more than likely.
My wife still thinks I’m silly for thinking a bank would take $40,000 when they could, very possibly, make $62,000 on. She went on to complain; “Besides, the seller is not upside down and is paying their loans on time, keeping the bank happy.” She is stuck on wondering why I would expect any bank to accept $40,000 under any negotiation in a situation like this.
I then began to explain how appreciation works and market value, how banks invest and other factors to help her understand the areas of appreciation that this house could but does not fit into. Eventually I realized I was just confusing her more; pushing her further away from having the desire much less the ability to understand my reasoning. I finally figured how I could explain it in an easier way that she could understand. I said, “Wouldn’t you rather receive a large sum of $40,000 today or wait 25-30 years (however long the loan term is) to receive the $62,000 at only, say, $500 per month (or whatever the monthly payments may be).” I went on with, “If the bank gets $40,000 today they then have a new opportunity they didn’t have before… to invest that large sum of money somewhere else that could very possibly and more than likely make more than the $62,000 and we all know banks are masters at stretching out every dollar). Rather than continuing to received the $500 per month, where this is little room to make other investments, theoretically, the bank should be willing to do some negotiating.
I’m not a seasoned investor but I think that my wife doesn’t realize the $62,000 figure is considered a fixed amount where the interest may vary, but the $62,000 principle is all the bank would get.”I felt that she appreciated my reasoning some, but she still seems confused. I need her support in order to move forward. I feel if I can get her support that it will help me to formulate the rest of my plans.

Keep dreaming, and while your at it take a few business courses. They make their money long term and they will receive a heck of allot more than 62K for the home

water in crawlspace, should I not buy house?

admin — Fri, 12 Mar 2010 23:24:12 +0000

I am looking to buy this house, already accepted it but no inspections yet. I noticed about 3 inches deep water in crawlspace, not sure if this should be a deal breaker, homes are selling too fast around here. Home is on grade why is there water. I will have inspections done but should I just call it all off and save my $$$?

the cause of the water could be simply fixed like stated before-a poorly placed downspout or drainage route. or, it could be an indicator of a serious problem like poor waterproofing of the foundation or leaking pipes/drains. the only way to be sure is to have it inspected. you can then negotiate the cost of resolving the problem with the seller.

Should we buy a house with termite damage on the roof and garage?

admin — Fri, 12 Mar 2010 23:23:58 +0000

We are at the final stage of buyoing the house we really loved. However during termite inspection, the inspector found termite damage on the roof and the garage. We are wondering if it’s worth persueing the house if the seller agrees to fix it. Also how sever the damage can be if the termites are found on the roof.

I wouldn’t buy it. The seller will probably try to get the cheapest job done. He was already too cheap to have a termite bond.

Don’t forget this. They ate their way to the roof. That is the only way they could have gotten there.

With the real estate market the way it is there is absolutely no reason to take a chance on buying a problem house no matter how much you love it.

You know rule one when buying a house is walk away if everything isn’t the way you want it. Never fall in love with a house, it’s like grocery shopping when you are starving only way more expensive!