Red Flags or Standard Procedure...

[Ryan Klemetson]

Hello Bigger Pockets,

I have a foreclosed triplex under contract for $24,000. (Other numbers below for those interested.) However, my real question has to do with a couple of red flags that we are seeing that may just be standard procedure for the hedge fund that owns the property. (Assumed hedge fund since "NRZ REO V2CORP" is listed as the owner on the assessors website and Google tells me NRZ is a entity owned by a hedge fund.)

Red Flags:

1. All water, gas, and electricity is turned off and they will not turn them on for inspection. (Water is standard procedure in my area as they winterize the property, but first time I ran into a place where they won't turn on the electric). I have confirmed two of the units were occupied at time of foreclosure last June, so I am a little less worried about this than l could be. 

2. Requires $3,000 earnest money deposit, a bit much for a $24K property.

3. Only 3 days for inspection.

4. The seller's agent has mentioned twice that I will want my own attorney at closing. Are there any problems that could arise that my lawyer won't see doing a title search? 

(This is the first time I have worked with this agent. He may just be making sure I know, or he may be hinting at something else.)

Any help, suggestions, or foreclosure horror stories would be greatly appreciated.

Other Numbers:

Total rent revenue will be $2,000 a month if all three units are full.

My general contractor suggest all of the repairs will be about $40,000 to $50,000.  I have used him on 2 other properties and his estimates have been fairly good so far.

The electrical and plumbing that we can see is updated and the roof is only a 2 years old. However, most of the sheet rock needs to be replaced, and the kitchens and bathrooms need a serious face lift.

Property taxes are $2,100 a year.

This is a C class neighborhood, fully renovated may be sold for $120K to $140K. Goal would be to refinance after renovating.

Purchasing and fixing with my own cash, no hard money lenders who would need to be paid.