Buying a Foreclosure

[Ryan O'Leary]

Hello everyone. I'm currently in living in Hawaii but am originally from Massachusetts. I used my VA loan in Hawaii that I'm currently house hacking until I leave in 2021, where I'll try to rent it out once I leave.

While I’m over here, I would like to buy my second investment in Worcester, MA where I’m originally from. I would like to buy a 3-family foreclosure that is going for $100k that needs work.

1. Via Auction.com, does anyone know how these foreclosures work? Can I just bid for $75k and see if I win it? Or is there usually a minimum on the given property?

2. If I were to win this bid at $100k, I would be able to put the 20% down myself to qualify for a conventional loan (since I can't use the rest of my VA loan benefits since the property isn't in Hawaii and I wouldn't be occupying it for 12 months). However, I would want to put about $50-75k into the property to update floors, carpets, appliances, etc if needed... should I be getting a second loan for the rehab? I'm not too familiar with other financing options. My family was willing to give $30k that I would pay back over 3-4 years. I'm not sure how else to rehab it.

3. My dad is about to retire and would be my property manager, working with the contractor(s) to figure out what is needed for each unit, keep track of rent, tenant complaints/requests, etc. Any thoughts on family as property management?

4. Regarding property management... are there tax benefits to creating an LLC regarding my properties? Or an LLC regarding property management run by dad?

I know there’s a lot of scattered thoughts on here but I appreciate any feedback from the community. These podcasts and forums have been extremely helpful and I look forward to hearing from you all!

- Ryan

[Cynthia Bankston]

Hi Ryan. My name is Cynthia. I work for Auction.com. Very nice to meet you! The seller of the property will have a reserve price--the lowest amount the seller is willing to accept for the property--that will need to be met before the seller is obligated to sell the property. Please let me know if you have questions. Thank you.