A buddy of mine who is a fellow bear, has promised himself that he will only buy a foreclosure.
Now the truth is, foreclosures are often not the best deals. You have to present an offer with 'no subjects' to the court, who can refuse your offer, or you can do all the leg work, and someone else can bid higher on court day and you lose the property.
Usually foreclosures are not left in the best of conditions, as the disgruntled previous owners have neglected maintenance and take anything that isn't (and often is!) nailed down.
However there are bargains to be had, especially in this market.
Anyway back to my buddy. He has been looking over a very nice townhouse in foreclosure on Howe Street, near the water.
Now please note I take this information from what he has shown me, and what the realtor has told him, so if anyone knows of any errors, please tell me and I will correct them.
The unit is 2100 foot +/-
It is listed at $799 K
Built in the early 90's
Now here is some amazing stuff:
The original owners paid $432 K for it 11.5 years ago
The current mortgage on it is apparently over $1 m, due to equity withdrawals
A unit ( I think it was the last one to sell) sold in the complex for around $1.2 Million in December 2007.
Some fishy thoughts :
That is a lot of equity withdrawal the previous owners made! - did they still have any skin in the game when they went inot foreclosure? I doubt it.
This unit is getting close to a cash flow neutral price, for those interested in buying and renting.
Look at the loss of equity the other 20+/- owners of the complex have taken between the Dec 07 sale and this one. That is a lot of paper wealth that has just evaporated.