More trouble than it’s worth?

[Cedrick Givens]

There’s a 3-1 available near me for($30k) BUT has this as the overview: All Highest, Best & final offers must be submitted by 12/5/21. "This property is being marketed occupied. The interior of the property cannot be accessed. The foreclosure has already been completed for this property. The purchaser is responsible for the eviction process. When viewing the property please do not disturb the occupant." The Seller is the USDA……. I’m interested but Is something like this worth the headache? I know there a lot more cost to consider.

[Joe Villeneuve]

I'd say your concerns are valid.  I wouldn't describe this as even "low hanging fruit", but as the "fruit that is on the ground".  There are so many unknowns here that carry big dollar amounts (rehab needed) and aggravation (evicting tenants that have probably been living rent free while the foreclosure process has been in action).

My guess, is you're going to "get what you paid for"....and then have to pay a lot more.  This is a not so shiny object of distraction.

[Cedrick Givens]

Haha I totally understand!  As soon as I read the part about the eviction I thought red flags @Joe Villeneuve

[Scott M.]

Have purchased a large number of homes like this over years and it is simply a risk reward game.  Win some, lose some.  When we did this the vast majority of occupants were homeowners who fell behind for one reason or the other and the bank refused to deal with them so instead they foreclosed and then give you a better deal then they ever considered for the occupant.  We normally did land contract buy backs with the occupant.  On some occasion we would rent to them and even fewer we would have to evict. 

Just know there is a high probability that the occupant will not be happy that you picked up the home for a song when they were willing to pay the bank more.  But if you are into land contracts these can often be great deals.

But beware, these are not for the faint at heart and I would not sink your life savings into the deal.  Buying blind is high risk.  

[Theresa Harris]

I agree with the others.  How much is it worth after renos (assuming worst case for renos)?

[Ron Brady]

@Cedrick Givens We just bought one of these and thus do not have the experience of @Scott M.  This said, like Scott, these can be an opportunity IF the relevant conditions are met.  In our case, we made the effort because a) we're on our 7th property, b) we have sufficient reserves to weather ups and downs with the property c) we have an attorney we've previously worked with and trust to help us with the resident ejectment, d) the purchase price was low enough to give us sufficient room for error, e) we have contractors with whom we've worked who we believe can timely renovate the property and f) we were prepared to get it wrong and either lose money on this or sell the property at break-even, a small profit or a small loss.  Only with these elements in place did we act on our opportunity.  Good luck!

[Cedrick Givens]

Thanks everyone, @Theresa Harris 70k ARV…. @Ron Brady  I see your point and Im definitely not where you are yet, this would make property number 2(Too risky)