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This Weeks Featured Article
REIF Investors Make Quick Profit Buying at the Foreclosure Auction
“Can we really make money in this real estate market flipping houses?”
We hear that question quite a bit around our office. Usually it comes up on Tuesday during our weekly workshop for new clients & investors on “How to buy foreclosure auction homes, short sales and bank owned/REO’s”.
The answer is most definitely YES! With accurate property research and due diligence combined with a keen knowledge of current market conditions and throw in a little luck for good measure you can make consistant and sizeable profits time and time again.
Below are the details on a recent foreclosure auction purchase made by an investor working with Real Estate Investment Firm, LLC.
Rosario Place, Renton WA
REIF foreclosure purchase
This property was purchased on March 27th 2009 at the King County Foreclosure Auctionfor $1.00 over the lenders opening bid of $364,650.00. When this property was reviewed in our Auction Investor Meeting the night before, the REIF Auction Specialist told the group that a cash buyer could purchase and flip this property in under 90 days and make a net pre-tax profit of approximately $40,000.00. In the end it only took 67 days from the purchase date until escrow closed on the re-sale. When all the costs for acquisition, fix-up, holding and re-sale were calculated, the net profit to our client was $39,463.00 Below is a breakdown of those figures and a chart that shows the ROI (return on investment) for this transaction.
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Rosario Place Breakdow |
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Purchase Price |
$364,651 |
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Purchase Comm. |
$10,940 |
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Fix-up costs |
$3,500 |
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Total Purchase Cost |
$379,091 |
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Sale Price |
$454,950 |
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Sales Costs |
$36,396 |
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|
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Net Sale Price |
$418,554 |
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Minus Purch Cost |
$379,091 |
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|
|
|
Net Profit |
$39,463 |
|
Return on Investment Calculation |
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|---|---|
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Amount Invested?: |
$379,091.00 |
|
Start Date?: |
03/27/2009 |
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Amount Returned?: |
$418,554.00 |
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End Date?: |
06/02/2009 |
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Gain or Loss: |
$39,463.00 |
|
Percentage Gain or Loss (%): |
10.4% |
|
Annualized Return on Investment %: |
56.7% |
If we extrapolate this data out to a 12 month time-frame, it would roughly work out to an anual net income before taxes of $240,000.00. Keep in mind as well that the investor who bought this house only spent approximately 30-40 hours of his time working on the property.
If you would like to learn how you can help secure your financial future by investing in foreclosures and distressed real estate then I encourage you to attend one of our free foreclosure investing workshops. They are held every Tuesday at 5:30 pm at our downtown Redmond office
Contractors Board up House with Former Owner Still Inside
A man in Minneapolis, MN recently became a prisoner in what was formally his home after it was foreclosed on by the lender. As Ted Poetsch was working to get his pet cat into a pet carrier workmen were busy outside his home securing sheets of plywood over the windows and doors.
Luckily, Mr. Poetsch was rescued by his former attorney before [...]
How to buy foreclosures, bank owned and short sale properties
Buying or investing in properties that are in the foreclosure process is your wealth building opportunity!
Did you know that NOW is the best time to invest in foreclosure properties?
Many people are interested in investing in properties that are in the foreclosure process, but are unsure of the steps to take to get started.
The market conditions of today have converged [...]
Bank Demolishes 16 Newly Constructed Homes After Foreclosing
Guaranty Bank recently foreclosed on 16 new and partially built homes in Victorville CA, a town 85 miles northeast of Los Angeles. Four of the homes were substantially completed and the other twelve were 50% completed or less.
Guaranty Bank, whose parent company, Guarantee Financial Group was recently issued a “cease and desist” order by the Federal Office of [...]
Your Foreclosure Questions Answered
The Seattle Times had a Foreclosure Q & A session on their website today with an attorney and housing councelor answering peoples questions about foreclosure and the foreclosure process. There is some very good information given.
Click here for the link to the Times web site and the story.
Foreclosures Surge in March
A recent article on MSN Money describes the surge last month in foreclosure activity around the country. March 2009 saw a 46% increase over March 2008.
Much of the increase is attributed to lenders lifting temporary moratoriums and resuming legal actions against delinquent mortgage holders.
To read the full article click here
Locally, the total number of properties [...]
Exciting News for Real Estate Investors
Some very exciting news for Real Estate Investors and potentially for those of us who’s livelihoods depend on the Real Estate Market.
We just received a bulletin from Fannie Mae that they are updating their guidelines to allow a maximum of 10 properties financed when the subject property is investment or second home.
LTV/ Fico Matrix for 5-10 properties financed
Second Home [...]
King County Foreclosure Auction Sales Stats - December 2008
Here are the sales statistics for the King County Foreclosure Auction for the month of December 2008.
There were a total of 539 properties scheduled for foreclosure auction during December. Two thirds were canceled sales, almost a third reverted back to the lender, and just under five percent were purchased by a third party.
If you are [...]
King County Foreclosure Auction Statistics for December 5th 2008
December 5th was one of the biggest days the foreclosure auction has seen in recent times in King County. After several dozen postponements there were a total of 203 properties left on the schedule for Friday morning’s foreclosure auction’s in Seattle and Bellevue.
Of those 203 properties:
11 were picked up by 3rd parties at the auction
51 reverted back [...]
Will low interest rates bring buyers back to the table
Conforming 30 year fixed rates mortgage loans have dropped considerably this past week. Locally Citibank and Countrywide are offering a 30 year fixed conforming loan for 4.875% with a cost of 2.250% and 2.000% respectfully.
Will these never before seen interest rates prompt buyers back into buying again or will they sit on the sideline in [...]
