Are you wondering if you can capitalize on the foreclosure crisis that you read about in the news every day?    Do you think that you can get 50 cents on the dollar for the right foreclosed property?

Personally, I don’t think you can get properties for half of their market value, but I do think you can get about 90-95 cents on the dollar.  There are some good deals out there for the savvy buyer but there are some inconveniences associated with purchasing bank owned properties that you may need to endure in order to make it happen.

1. The property might be missing appliances.  Disgruntled home owners losing their property to foreclosure often take the appliances with them or sell them before they move out since they are walking away with no return on their investment anyways.
2. You may need to remove the contingencies from your offer in order to be the winning bid.  Banks do not look favorably on inspection contingencies.  You may be able to get a property for tens of thousands cheaper if you have no mortgage contingency on your offer as well.  They want these properties off the books quick!  However, even if you don’t put an inspection contingency in your offer you can still have one for informational purposes.
3. The bank is not going to fix the issues that arise during your inspection; properties are sold “As is”.  They will probably not give you any money off the purchase price either.  The only way they might give money back is if it is a major defect that they were unaware about before the inspection (I.e. frozen pipes or central air is broken).
4. You need to act quickly and be prepared for a bidding situation.  Most bank owned properties are on the market for about 5 days (If they come on at the right price), even if an offer comes in on the first day!  The banks don’t want to look at the offers until they have given everyone a chance to see the property.  Very often if there will be multiple offers in, the bank will then reject every offer and ask prospective buyers to submit their best and final offer before a certain deadline.
5. You will not be able to make adjustments to the purchase and sale agreement.  The bank will use a boiler plate purchase and sale agreement with their addendum attached.  Even if you have a real estate attorney that wants to make edits to the contract protecting your interests it is very unlikely the bank will allow that.

If these issues don’t bother you and you can look beyond a messy property that may be missing appliances so long as it is a great investment, then you are ready for the exciting opportunities that REO’s (Real Estate Owned (by a bank)).  

Here are some REOs that have been on the market recently:

1.       19 Adelaide Street #3 – $195,000 Jamaica Plain. A second floor 741 square foot condo with deeded parking and storage on a great street.  Comparable properties in this building have sold for 240k and up!  Granted the appliances are missing and  the floors could use a good sanding, I would think that you would definitely recoup those costs in an investment if this were purchased for a flip.

2.       11 Telegraph Street #1 – $203,900 South Boston. This 2 bed 1 bath on the East Side features 858 square feet, granite countertops, and hardwood floors.   Typical renovated 2 beds on the east side of Southie are selling between 300-350k.  Although I haven’t been inside this foreclosure so there could be a reason it is this cheap!

3.       193 West Canton Street #4 - $394,900 South End.  Whats this one?  A 700 square foot renovated penthouse on a beautiful centrally located South End Street with laundry in unit, working fireplace, granite/stainless kitchen and PRIVATE ROOF DECK overlooking the whole city! For only 564/foot!  I had a client bid on this one but the competition was a bit fierce.

4.       28R Phillips Street - $885,000 Beacon Hill.  New construction, single family townhome on Beacon Hill. Currently a +-1,500 SQFT 2 bed/2 bath.  Fully renovated property has 3 levels, with expansion potential to finish the 4th level & add head house and roof deck.  Central A/C, laundry, 2 gas fireplaces & +-300 SQFT private patio.  Not a bad deal considering the average single family on the market in Beacon Hill is $4.25 mil right now.  This is actually one of Charlesgate Realty Groups listings; Click here if you would like more information!

 

We at Charlesgate Realty Group, Llc have a great pipeline of our own foreclosure opportunities we would be happy to share with you in addition to being able to show you any other ones listed throughout other brokerages in the city.  Click here to set up a showing for any foreclosure or just to discuss inventory and what opportunities are out there for you!