All Forum Posts by: Barry Craig

Alabama does have a one year right of redemption but you can purchase a redemption bond that assures you get your money back if the owner redeems.
IF you hold senior lien, the second would have to redeem both.

You can rent the property immediately once your closing takes place. How in the world did you get title insurance and a clear title from the bank/owner?

I never buy at auction. You can get better terms and guarantees by buying through an RE agent that an REO is listing with. My buyer's agent is great and gets me listings the day before they hit the MLS. Some banks are willing to cut deals as soon as the properties are listed and some like for them to sit a bit.

Do your homework. Know your property before any money changes hands. You may have trouble obtaining a bond for this one.

I placed a bank-owned property under contract last week. I went by to take some additional photos and get some repair measurements and found that the back door was kicked in and house was ransacked.

I called the listing agent but she didn't seem to interested in doing anything about it.

What does the law say about this? Who is responsible for repairs?

What steps should I take next?

My closing is set for Feb. 25

Thanks in advance for any insight into this problem.

My financing sources will not finance a bank-owned property with any time left on the "right of redemption." I have pre-approval to do 4-5 of the 50,000 deals that meet MikeOH's 50% rule but it isn't much good to have the funds available if the lenders will not finance.
Most bank-owned properties I have found, the REO officers are cutting prices and willing to deal, but here in Alabama, the one year right of redemption is holding up my financing.

Any ideas?

By the way, bought MikeOH's book. Well worth the price. Great job, guy!

One property I am checking has been held so long by the bank the right of redemption is up. I am assuming I would receive a general warranty deed if purchased?
This property did not have a bid at online auction, so I am offering 50% of the unbid price. (bid price 70% below sold comps on the same street)

Along a different train of thought
If I purchase a REO with six months left on the redemption period, how do it work if the owner redeems? How often does the owner in default do this?
How does the right of redemption work?

Thanks to you guys for the input!

Yes, the tenant will pay all utilities.

What I left out was that there is a finished basement with 1B/1B. It is gutted and ugly but over time can be renovated as an additional rental!
It is separately metered for utilities.

Someone said I lucked into this deal, but they were not around for the three months of research I did, and the other chances I turned down that were just a little out of the formula.

Mike OH has been an inspiration with his 50% rule and tough financing stance.

Thanks again.

House on market for 55,000

3bed/2bath
No real repairs, just cleaning/paint.
Good roof, updated wiring,plumbing,siding
Fenced 0.56 acre lot

Sold comps 50,000 to 68,000

I can get this property for 16,812. (Clear title, no liens) :D

Rents for area: 550-650

Financing in place with 10% dwn at 15yr/7.50 % = 141.00/month

The numbers:
Rent 550/month

Management - 55.00 (10%)
Maint. res. - 55.00 (10%)
Taxes - 54.00 (650.00/year)
Insurance - 42.00 (500/year)
Vacancy - 28.00 (5%)

Total expenses - 234.00/month
Mortgage 142.00/month
-------------------------------------
Total 550.00 - 375.00 = 175/month cash flow

Cash flow good enough?
Anything I'm leaving out?
I value your input and I love this board!

20 Unit Brick Apartment, Pitched Roof (new x 5 years)
Separate metered utilities (owner pays none)
All electric central air/heat
No Vacancy, waiting list to get in

Debt service: Asking 750,000 Get for 680,000

680,000 at 10% down 7.75% 30year

Year: 2007
Scheduled Gross Income: $125,400
Vacancy: $3,000 (never know)
Effective Gross Income: $122,400
Maintenance: $8,000
Taxes: $2,809
Insurance: $8,000
Management/Grounds/Misc: $18,502
Total Expenses: $37,311
Net Operating Income: $85,099
Debt Service: $53,573
Pre-Tax Cash Flow: $31,526
Monthly Per Unit Cash Flow: $138.20

2 bed 1 bath
No. Units: 19
SF: 777
Avg. Mo. Rent: $550

2 bed 1 bath resident care taker
No. Units: 1
SF: 777
Avg. Mo. Rent: $0

Can add laundry for additional income, rents can go up 10%

What's the consensus? Deal or no deal?

I live in the Adamsville area and know nothing about Lowes or any other big name moving in. The area is in decline, not growth. Also, are you buying to flip or rent? Hard money lenders would be your best bet for fonancing but the average time on the market for Adamsville is 6 months.(By the way, 2/1's are hard to move)
According to anlysis, only 12% of Adamsville area rents with a 10% vacancy rate. Adamsville/Forestdale tends to attract low-end renters and are harder to manage. Hate to be doom and gloom but I have done ny research.

I have found several "rundown'" empty properties in nice neighborhoods. Talking with the neighbors has not yielded much info. How do I find owner info and mortgage /tax info with just an address?

Please help the new guy!
I found an REO that a quick talk with neighbor revealed interesting stuff. A murder took place there. House has been empty awhile(10 months) it is a little run down. Would take about 1400.00 to make it rentable. All houses in the area rent at 95% occupancy. (Good area
Question? How do I find out what the mortgage balance was when the house was foreclosed. I am scheduled to see the repo officer at the bank (friend of a friend) but i need to find out what the bank has in it to run the ROI and cost numbers. Is there a website or something?
By the way, I have been reading my brains out on every real estate investment book I can get my hands on!
I am building a network of needed people.
I have a :
Real estate attorney
Mortgage lender
General contractor
Property manager
Three real estate brokers
These are all friends or family. Any suggestions?