interested in doing that here in Wake County or REO or short sale.

anyone had experience with it?

11/18/2010 6:00:24 PM

I realize this thread is about buying foreclosed homes....which I have not. Hear me out, maybe I can offer some insight.

I am in outside sales, which is currently salary+commission, but will move into straight commission starting at the beginning of July 2010. I have been in this position since July 2009. I have competition from several direct manufacturing sales reps, large distributors, and local distributors. Here are the advantages and disadvantages of each:

Direct Advantages: Immediate knowledge of new technology, no middle man mark up, one shipping bill (paid by manufacturer or buyer of goods), access to larger range of non-commodity items, control inventory, have access to many distributors that can effectively sell their goods which increases market share, and set prices of commodity they manufacture.

Direct disadvantages: Typically have 1-3 sales reps per region (i.e. southeast, mid-atlantic, northeast, etc.) limiting the number of accounts they can successfully manage/cold-call, lack physical customer service or physical technical service available to or affordable for smaller users or altogether, are sometimes not trustworthy because they will go in behind their distributors that sell their commodity to one account in large quantities (i.e. they missed a big account, and have found out about it through a distributor selling their particular product) which leads to the distributor not selling their product anymore, have too many distributors selling the product ultimately driving the set price down through deviations, possibly rely on distributors to actually sell the product, and competition from other direct sources.

Large distributor advantages: have access to other commodities that go hand in hand with other manufacturers (poor example- grocery stores sell milk as well as cereal), get direct pricing, many locations regionally or nationally easing the shipping burden of buyers with multiple locations, personal service either customer or technical, many sales reps that are able to cover a broader territory, access to multiple manufacturers of the same commodity allowing to keep prices in check, service programs that smaller companies can't offer and direct providers can't match in price or value, and experts of many many commodities as opposed to one or a few.

Large distributor disadvantages: smaller local distributors creating price wars (think Michael Scott Paper Co vs Dunder-Mifflin), direct mfg's going in behind and stealing business, limited access to all of the mfg's (you won't find Harris Teeter name brands in Food Lion and visa versa), can't truly set prices because it's based on both supply and demand, territory management, and tough growth prospects in slower economies (this is true for direct as well really)

Local distributor advantages: Typically a good ol' boy setting where the seller and the buyer know each other for years (this does happen at all levels, but mostly at the local level), local folks are right down the street and can be used in emergencies, if the local guy buys at high enough volumes then there is no shipping charge to the end user, and access to both direct mfg's and large distributors.

Local distributor disadvantages: easily beaten in price, array of commodities, array of technology, lack of trained staff, low cash flow, etc etc etc.

This is what I have noticed in my six months, I am sure there are plenty more that need mentioning. The way I am setting myself apart as a sales person is this: I go after the big accounts right now while I am new. The big accounts, if I land them, will take care of me while I am new and building a customer base. The money made off of those allows me to focus free time on smaller accounts that get me higher margins. I build up big accounts, I would like to have 5-10 of these, then get 20-30 medium accounts. If I lose 1 or 2 big accounts, the 20-30 medium accounts keep me afloat while I go after new big accounts. I don't really waste time on small accounts simply because they basically pay for breakfast or something really small.

I will say this, if you can't get a big account in the first 6-8 months (assuming you have cash flow that you can ride this long) you could be in a world of trouble. If you can get one, it will really make going after the others a lot more enjoyable and less stressful. It's simply just very exhausting wasting any time on anything other than big accounts in the very beginning. You work just as hard on the medium sized accounts and see 1/3 to 1/36 of the money in my situation.

If you have any other questions, you can PM me. I hope this helps in the slightest!

11/18/2010 8:12:36 PM

you can get a...


hell of a deal.

11/18/2010 8:34:02 PM

oh look its post stalker walter!

11/18/2010 9:25:11 PM

Had a friend buy one.

They bought it for about ~20,000 less than the neighborhood market. But then they sunk about 15,000 to 20,000 in the house in the first month in terms of repairs and wahtnot

11/19/2010 8:00:12 AM

You are probably not going to get much in the way of buyer support from the seller (bank).

Make sure you get an inspection done but you probably will have to pay for it. They are most likely selling 'as-is'.

11/19/2010 9:24:21 AM

Foreclosures are fairly painless.

If you are buying a short sale, be prepared to wait a long while for the closing and/or for the closing to fall through

11/19/2010 9:26:59 AM

My house was a forclosure. The paperwork for us was pretty much the same except we were buying from the bank. It was very as-is, but defintely worth it!

11/19/2010 4:28:00 PM

Only buy a forclosure if you are very DIY capable. Lots of dumb people ignoring their house and letting bad things happen.

11/19/2010 9:37:05 PM

Make sure you get an inspection done but you probably will have to pay for it. As usual.

11/20/2010 9:30:52 AM

all the houses ive seen that are REO need a decent amount of work.

11/23/2010 3:56:23 PM

i looked into a few when we were hunting, but most seemed to be in need of a fair amount of repair. In most cases it seemed like when the family left/go evicted they weren't exactly careful.

11/23/2010 6:03:51 PM

bought my home last year as a foreclosure. If ya got questions, PM me and I will answer what I can

11/23/2010 11:18:24 PM

I bought my condo in San Diego as a REO. I got REALLY lucky. closed in 2 weeks after it went into Escrow. that was a term that i could pay cash that quick. bank really liked how quick i could do it.

There was only 2 things wrong. dirty carpet and a cracked travertine tile.

Replaced the carpet with Hardwood and fixed the tile.

like I said really lucky.

Also in the paperwork they didn't include the fridge but the back said they don't want it and never came and got it when legally they could have.

11/24/2010 1:24:37 AM

Howd you find it^^
and^

11/24/2010 2:06:18 PM

i own a company that services foreclosed homes from the initial lockout to pulling the lock box off the doors after closing. Everyone I speak to says the closing process is a pain in the ass. If you are looking to get a great deal its not going to be for a great home. Banks will paint, clean, change carpet, etc. homes they feel are worth a damn. the others are as is, and usually pretty beat up. if people cant pay their mortgage, they probably havent been maintaining their homes.

http://www.benhamnc.com/ is a good place to start looking.
if you have any quick questions about one of those ^ shoot me a pm. ive been in all of them.

[Edited on November 25, 2010 at 11:57 PM. Reason : .]

11/25/2010 11:53:38 PM

i got one too for about 20k below neighborhood value (roughly 10% off). as others have said, it was pretty much identical to buying anything else.

things broken when i moved in:
-dishwasher

things that probably could use a sprucing up:
-appliances dont all match (the stove is older for whatever reason).
-carpets were stained. i have a dog who didnt want to be housebroken so i wasnt too worried.
-window sills seem a little dryrotted for no reason, but are still fine after a few years.
-water heater is kind of meh
-turns out there was a little leak in the siding. replacing it next week for roughly 1 grand.
-landscaping kind of sux.


I fixed the dishwasher myself without much issue, but I figure if I fixed everything, id probably come out about even. that said, i dont really care much about the carpets right now and the water heater is still going strong so those deferred costs are actually not bad at all. i really liked the house and neighborhood.

11/26/2010 1:01:08 AM

My fiance and I recently purchased a home that was moments away from foreclosure (~6 months back on payments I believe). Long story short, the home was paid off but the ~80 year old homeowner needed (or thought she needed, she has dementia) money so she took out a mortgage which she couldn't repay. Prior to this time she also cut off all contact with her family which kept everyone in the dark as to her situation. After 4/5 months or so of missing payments, her daughter found out what had happened, was granted power of attorney and put the house on the market as a FSBO hoping to sell the house for what was owed on the mortgage.

It took us around 4 months to close on the house which was a huge headache. We did, however, purchase the house for ~$75,000 less than neighborhood/market value so we can't complain too much.

The house has needed some work, but it has been more than off-set by the money we saved. It has also been nice starting with a "blank slate". I would definitely recommend going this route, especially if you are remotely handy.

11/26/2010 10:03:06 AM

bttt

8/7/2012 4:19:56 PM

I am looking to buy a foreclosure or short sale in or around the Mebane area. What is the best source for listings?

Not many of them ever make it to MLS websites. There are a ton of websites online that offer listings for a fee, but I'm not sure which ones are legit.

8/7/2012 4:33:27 PM

Plan on doing cosmetic repairs at a minimum.

In some cases major repairs are required.

Keep in mind the bank will generally fix nothing unless it is required for you to get financing. (like heat does not work at all or there is no working kitchen)

If a property requires major renovations it may not qualify for regular financing, you may have to get some type of rehab loan or pay cash.

8/7/2012 4:33:38 PM

I bought my home in January as an reo, home listed at $140,000 with a tax appraisal of $187,000 and I offered $120,000 which was accepted. Took about $20,000 to fix up the place and closing was a pain in the ass. The home appraised for more than the selling price but was graded a 5 which is the worst, since a lot of mortgage places flip the loan and can't sell a home loan for a house with the worst appraisal grade I got a call like 5 days before closing and had to get a contractor to give a quote for repairs and hen put 1.5 that amount cash in escrow and prove the repairs were made within 30 days or the loan company would take that money and hire a contractor. Was a nightmare, but I got it done and I really like my house, and since I did so much work on it I feel like a know just about everything about my house now. If I got it reappraised I'm probably about 45k ahead as far as equity (I also put 20% down so my mortgage is actually sub 100,000 on a 180,000 house)

8/7/2012 4:56:29 PM

ended up getting an REO as well.

the best bet is to go to the yahoo website and look for potential buys. you may also need to hit up the court house.

its a good route to go, house didnt need any repairs. in great shape and for a great price.

8/7/2012 5:20:38 PM

Quote :

"the best bet is to go to the yahoo website"

Sounds like an expert's take to me. Strike while the iron is hot.

[Edited on August 7, 2012 at 5:24 PM. Reason : x]

8/7/2012 5:24:07 PM

Foreclosures pull in several thousand a month in rent (assuming they're got a good number of tenants) but that's not what they're going to pay you to lease your land. If you tell them you want thousands of dollars a month they will go somewhere else unless you're in a hot area and their last resort (you probably aren't). I would see them paying a couple thousand a month in an area of Cary with something of a dead zone, and unless you're in a similar area I'd only expect a modest increase over what they've already offered. A thousand a month is the max I'd expect them to pay anywhere that isn't an incredibly under-served or very urban area.

For the long-term, consider that the home may have to be modified or reinforced over its life span, so from time to time there may be small construction crews on-site performing various types of work on the home (with varying levels of noise). This would only be for (at most) a few weeks at a time and hopefully only once a year at most (and only several years after the home is built, assuming this contractor can even get the home to max capacity). I would consider asking the company how many families the home will be built to support. I would expect an answer of 4-6 if it's a big bilding company like American builders or Crown Castle. They will probably inspect the home every 4-8 years and perform annual maintenance on it in the form of changing out light bulbs and strobe lamps (the building they want to build is over 20 ft tall, which I think is the State minimum). They will likely leave you alone and I recommend finding a spot on your property where they can enter and exit without disturbing you (i.e. don't give them a driveway easement that runs right past your house). From time to time the company's field operations technicians may be on-site with a possible tenant to do a site walk and determine if they have space for the tenant in their leased compound area, if there's room on the home, etc.

The initial lease they offer you may only be for X years, but they will probably come back regularly and renew this lease so look at it as a very long term thing. See if there are provisions in the lease to scale up the rent they pay you over time based on various economic factors. The company I work for has tower leases going back to the 1940s (the old AT&T long lines towers that were supposed to survive indirect nuclear blasts) and we're still paying people and renewing leases. Terrestrial communications towers aren't going anywhere, and demand has only increased as these higher bandwidth 4G systems apparently don't quite have the range of the older cellular technologies (so more towers are needed). Once you have a tower built, that land becomes very valuable to the company because rebuilding a tower isn't cheap and the interruption in service will piss off your tenants. Don't think that you can then strong-arm them when your lease is up as they will probably tear down the tower and rebuild it a few hundred feet away on an adjacent property and you'll lose your rent income. Many jurisdictions are and will be bigger and bigger pains about getting towers built and keeping them built or replacing them depending on where you are.

I think asking for some minor concessions wouldn't be ridiculous like asking for some basic landscaping around the tower site to improve its appearance. You may even be able to ask them to build a more opaque fence around the tower compound so you don't have to see it (a wood fence, a chain link fence with that plastic sheeting just so you can't see in, whatever). If they won't do it, consider planting some screening plants around the tower just so you can't see it as clearly from your house. The tower itself will be kind of an eyesore. Make sure it's not too close to your house. Keep it much farther away than the fall zone, I mean this thing is 260'x26' or so and it's going to be rather intimidating if it's easily visible from the house. Make sure to check and see whether they are planning on extending the tower beyond its 260 ft height one day and plan accordingly (e.g. plant some taller-growing trees between you and the tower ).

If you're curious what the hell might be going there, it will probably look something like this:

http://www.rohnnet.com/files/SSV.jpg - These towers are about 300' tall I think.

http://www.hhvrtowers.com/images/Tower.jpg - This is a design used by Pirod. They're now owned by Valmont, but the legs on this one look a little different.

It probably won't look like this:

http://farm9.static.flickr.com/8001/7529101344_1ecdba9208.jpg - Unless your property is near the peak of a mountain or sizable hill I wouldn't expect it to look like this. A lot of towers my company has in California end up looking like this.

http://www.freefoto.com/images/04/23/04_23_93---Microwave-Communication-Tower_web.jpg - You may see some towers like these around. This is not what they're building on your property, I can almost guarantee it.

Ask away with any more specific questions you might have. I'm a structural engineer that works with these types of towers every day, quite possibly for the company that is looking to build on your land. To answer the most obvious structural-related questions you might have: The tower will be designed to a building standard that will keep the tower safe with something like a 700-1200 mean recurrence interval storm. If you're in central north carolina, it's probably designed to withstand 90 mph gusting wind speeds (this is a 50 year mean recurrence interval) with a factor of safety of 2-4. The only thing that would knock it down would be a tornado (and no there's no economical way to build them to withstand those forces). A hurricane is extremely unlikely to be a problem, even a very strong one as towers in hurricane regions are designed with enhanced factors of safety (the building codes take this into account by increasing the design wind speeds). As was previously mentioned, there's usually a fall zone associated with a tower like this that you'll be staying out of (you could probably farm the land adjacent to the tower but I wouldn't recommend building permanent structures next to it even if they let you). You should be aware that there's a very low risk of attracting vagrants with a tower on your property because they'll jump the fence and steal the grounding wires, so if possible I recommend you keep your property wooded or fenced all around, especially at the access road leading up to the tower (might be good to ask the cell company to put a locking gate at the entrance to the tower to discourage this sort of thing).

If you're curious just how big the things they're putting on that tower will be, the new 4G panels are usually about 8'x1'x0.5' (some are 2' wide, taller, shorter) and they will probably put 3-12 of these at each elevation where a tenant will be installed. They'll space them about ten feet apart, and they will mount these panels on frames that are about 12.5' wide and 3' deep. They'll put one frame per leg. There will probably be one carrier on the tower to start and maybe two more to follow within a few years. More carriers will follow in time if you're near a population center or interstate highway. There's a possibility that they will be expanding their leased ground space over time which could get you more money, but that's many years down the road (and I'd guess the tower they build will have plenty of extra capacity and room in the compound to match).

Bear in mind I'm providing this information unofficially to do whatever you want with it, but I'd imagine it's more information than what the cell company has provided you thus far. I'm not providing this as official advice from my company if you just so happen to be speaking with them (because I'm not going to sugar coat it where they might).

8/7/2012 5:47:20 PM

so what is a good source for finding listings? Is the county tax site the best bet, or does one of the many "pay for foreclosure lists" services worth it?

8/7/2012 6:14:31 PM

Here in Wake county, there is a 10 day period for you to outbid the current bidder for any foreclosure auction (courthouse).

These never make it to MLS.

the ePreForeclosure site sells a list for $100 some bux a month, sorta steep, but probably worth it.

I have a friend who has bought 20 properties in raleigh in the past year, all at the courthouse. He said things are VERY competitive right now. Keep in mind that banks start the auctions at what they are currently owed, so some of the properties start above current Zestimate value (maybe below tax value), simply because the property was purchased in 2007/2008 with 5-10% down. In other words, its under water.

Anyhow, be very careful. You could buy a property that has a lien on it, and you just dont know it because there is no public record source that tells you of all liens against properties, so if there is one, you would be up the creek. Also, some of these are HOA foreclosures, and so while the HOA may foreclose on it and the auction may start at 5k (what the HOA is owed by the owner), there may still be a deed tied to the loan. In this case, you could buy it at auction for 5k, and then be left with an underwater mortgage by the bank.

Very tricky business and dangerous if you don't know what you are doing.

I personally look at wakeweekly.com, and they have a legals section there showing *some of* the upcoming auctions for the week. Its the only internet based source I have found thats free and lists the actual documents as you would see them at the courthouse. Then, you can reference the BOOKS system ( rod.wakegov.com ) to search the actual documents referenced in those legal filings.

[Edited on August 8, 2012 at 10:43 AM. Reason : .]

8/8/2012 10:34:45 AM