How to Buy King County and Snohomish County Foreclosures for Below-Market Prices!

Tonight’s Real Estate Investment Firm investors’ meeting was standing room only!  Please continue to invite your friend and family to learn how to buy property for below-market prices! At Real Estate Investment Firm, we are here for you! We began the meeting with Kristian Aasgaarden, one of our senior partners, giving us the rundown of homes that were for sale at auction last Friday, 04/25/08.  You won’t believe the prices that some of these properties went for!

Check out our “Property of the Week” from last week!  Have you ever dreamed of owning a home on Mercer Island with lake views, but thought the cost was just too high?  Last week, you could have bought property ID # 1138172 (found by going to http://www.freewaforeclosurelist.com and entering property ID # 1138172) for only $1 above the opening bid at auction!  Are you sitting down?  It sold for just $522,001!  The estimated market value on this house is $882,500, and the previous owner had plans and permits to build a 3,400 square foot home (the existing structure is 1,170 square feet on a 7,656 square foot lot). 

Did you ever think that $341,000 couldn’t buy you much of a house on the Eastside?  You could have taken your pick at the King County auction last week, because 2 different homes each sold for that price.  Property ID 8810 in Kirkland, a 3 bedroom/2 bath, 1,550 square foot home on a 7,853 square foot lot, sold for just $341K at auction and it’s worth $420K Located in Des Moines, property ID 333357, a lovely 5 bedroom/3 bath, 2,750 square foot home on a 10,430 square foot lot, also went for just $341K and it’s worth $402,500! 

If you were looking for a condo in Kirkland, it could have been yours for $81,155.93 at auction last Friday (plus you’d need to pay the $212K mortgage, which you could do by refinancing).  Property ID 4880, a 3 bedroom/2 bath, 2-story condo, has an estimated market value of $366K–the buyer got over $70K in instant equity with this one!

Not everyone wants to flip houses, though–some investors prefer to rent them out, because it’s a monthly source of continuing cash flow.  Property 1166529 in Shoreline, a 3 bedroom/1 bath home worth almost $300K, went for just $220K to the lucky bidder last Friday.  This house is a great rental property and will be a nice addition to its new owner’s real estate portfolio. 

Unfortunately, sometimes nobody bids on a house, and when that happens, it reverts to the beneficiary (the bank), who then hires a real estate agent to sell the home.   A prime example of this is a lovely Sammamish Highlands home on almost 1 acre of land, so tranquil that even wild deer graze on the lawn.  Property ID 1177059 is a 5 bedroom/3 bath, 2,980 square foot home on a 40,800 square foot lot, worth $664K, and the actual opening bid was $493,110.08–but nobody placed a bid, so now the bank owns it and will try to sell it.

Matt Steele, founder of Real Estate Investment Firm, advised us that when you see a property up for auction and you don’t have the funds to purchase it, partner with someone else because you can make money on real estate.

Next, Kristian discussed some of the many great deals up for auction tomorrow, May 2, 2008–we covered mostly King County properties, with a few Snohomish County homes toward the end of the meeting, to give our investors a taste of what’s available up there.  Richard Arnett, one of our real estate agents who covers the Snohomish County homes, reminded us that many Snohomish County homes at auction don’t sell because there aren’t many bidders, so consider a trip up to Everett if you’re looking to invest in real estate!

Located in the desirable Phantom Lake neighborhood of Bellevue, property 11748, a 3 bedroom/3 bath, 1,860 square foot home with a deck on an 8,200 square foot lot, has a market value of over $525K, and its actual opening bid is just $368,397.98.  There’s a nice big equity spread on this one, as Kristian told us.  “Someone should buy this…There’s almost $200K [equity] on this one!”, he added.  Jack Neilly, another of our agents, knows the area and he told us that 90% of  other comparable homes in that neighborhood are up to $100K more in price than this one.  Matt told us that with a home like this, if you put just $25K into remodeling it, you can sell it for $499K.  The property is only 5 blocks from Phantom Lake Elementary School, within walking distance of Phantom Lake itself, and is a bike ride away from Microsoft.  The backyard is a good size, and the exterior condition of the home is excellent, but both the roof and the deck need to be pressure-washed. 

Are you looking to add a great rental property to your portfolio?  Then property ID 1177249 in Seattle is for you.  This 4 bedroom/2 bath, 1,720 square foot home on a large 16,500 square foot lot was built in 1940.  Its estimated opening bid is $202,001.67 and it’s worth almost $325K.  Because this land is zoned R8, you could actually put another home on the property.  One option would be to rent out the house while you wait for your subdivision permits to come through. 

One strategy that Kristian and Matt mentioned to us in the meeting is that the higher the estimated (or actual) opening bid on a house, the less amount of bidders there are.  That brings us to the next house, property ID 6512, located in Auburn.  Keep an eye out for a drop bid on this one, because its estimated opening bid is high at $679,784–this is more than its estimated market value of over $650K.  This 6 bd/4 ba, 4,210 square foot home on a 7,863 square foot lot, is beautiful and “like new” (built in 2001), with a deck that gives you a beautiful view of the valley below.  There are some unpaid homeowners’ association dues (over $6K) which will need to be paid after you buy the home at auction, however. 

Seeing such lovely homes prompted one of our investors to ask an important question–what happens if the foreclosed home is occupied, and prior to leaving it, the occupants (or someone else) vandalizes the home?  Matt advised us that we should buy an insurance policy on the home for $100 a month, with a $2,500 deductible, so that we’re covered.  This policy can be converted into a standard home insurance policy after the occupants have vacated the premises.

Can you actually buy a single family home in Seattle for around $200K?  There aren’t too many of them to be found, but property ID 1288971 is up for auction with an estimated opening bid of $212,959.84, and it’s worth $321K.  It’s a nice little 2 bd/1 ba, 1,060 sq ft home with an 860 sq ft basement (200 of which is actually finished–perhaps you could even add on to the finished portion of the basement, which would increase the amount of livable square feet of the home, if you’re willing to remodel).  Everybody should be looking to buy this house! 

Property ID 5520 is a lovely 5 bd/3 ba Seattle home with views of the water!  Its estimated opening bid is just $187,880.96, and it’s worth over $950K!  However, you’d have to pay off the $500K first mortgage after buying the house at auction.  It’s 3,460 sq ft on a 15,053 sq ft lot, and although it was built in 1911, it has obviously been remodeled since then.  It sold for over $770K just 3 years ago.  There’s a 50/50 chance as to whether or not it will actually be sold at auction tomorrow–there was going to be a short sale but the cash buyer wasn’t able to wire the money in time, so now the person is going to try to attend the auction in order to place the winning bid.  This person is one of our investors, and Matt reminded us that our policy here at Real Estate Investment Firm is “first come, first served”.

Property 1119066 is located in Kent’s Panther Lake neighborhood.  It would make a great little rental property, and it’s 1,440 sq ft home with 3 bd/2 ba on a 7,936 sq ft lot.  It’s only a couple of blocks from Panther Lake.

Property 1288972 in Seattle has a 90% chance that it’ll be postponed.  If you want to do a short sale on this house, then let us know.  It’s 1,130 sq ft on a 5,300 sq ft lot, with 2 bd and 1 ba.  The home has lake views and L3 zoning, which means you could build 3 different houses on it!  If you’re a developer, that’s $1 million on the table for you with an opportunity like this, according to Matt.  The estimated opening bid is $530,792.48 and it’s worth $713,500. 

Newcastle, located near Bellevue, has a beautiful home (property ID 230296) which just had an $80K drop bid!  The actual opening bid is just $553,530.26, but this 4 bd/ 3 ba, 2,560 sq ft home on a 10,270 sq ft lot is worth $650K.  One thing to keep in mind is that the previous owner owes $395K to the IRS, but Kristian assured us that they wouldn’t go after this home because they’re owed so much by the previous owner.  Legally, though, they have up to 120 days after the home is sold at auction to “redeem” it, which means they’ll pay you what you paid for it at auction.  You wouldn’t want to spend any on remodeling until the 121st day, though, because the IRS will only reimburse you for the property’s sale price at auction.  One investor asked if you would be able to sell a property like this during those 120 days, and Kristian told us that you could enter into a sale contract, but you wouldn’t be able to close on it until the 121st day.

Property ID 591487 in Kent is a 1,320 sq ft, 3 bd/2 ba home built in 1983, situated on a 9,227 sq ft lot.  Its estimated opening bid is $194,852.32 and it’s worth over $275K.  This is a well-kept, great home with a great price!  It’s got a lot of life left in it.  There is $3,700 in delinquent property taxes on it that will need to be paid after it’s purchased at auction, though.  The house’s auction date has been postponed several times, but it might go tomorrow, so keep your eyes open for it.

Another home in the south end is property ID 1177256 in Auburn.  This 2,180 sq ft, 3 bd/3 ba home, located on a 7,161 sq ft lot, has a 2 car garage.  The actual opening bid is $252K and the market value is $336,500, so because there’s not a lot of equity in it, it would make a good rental or end-user property.

Up on the Eastside in Bellevue, property 2207 is a 5 bd/3 ba, 3,450 sq ft home on a 10,431 sq ft lot.  Its actual opening bid is $474,221.97 with a market value of $600K.  It needs a new roof, but once you’ve done that, you could rent out this house by the room, since it’s near Bellevue Community College and Microsoft.  There are 2 judgments against it, adding up to a grand total of $21,135, which may or may not have already been paid.  The judgments will continue to accumulate interest, but you don’t need to pay them at the auction–you can pay them afterward.  There are also delinquent property taxes owed ($3,940.76), which can be dealt with after buying the house at auction.  The home is occupied, but the tenant is legally required to leave after being served with eviction papers–we can help you with this process.

Property ID 1288958 in Redmond is a definite end-user property.  The actual opening bid is $917,926.98, and the market value is almost $1 million.  It’s a 4 bd/3 ba, 4,470 sq ft home on a 2 acre property, where you’re far enough away from your neighbors that you’d have your privacy.  The garage itself is 930 square feet, so it can probably hold 4-5 cars in it.  This lovely home is only 5 minutes away from the Newcastle golf course, and when the real estate market goes back up again, you’ll be glad you bought this when you did–and at a discount, too, no less, due to purchasing it at auction–because this home’s value will definitely increase.

In Issaquah, property 1177273 is a 2,310 sq ft home on a 1,560 sq ft lot with 4 bd/3 ba.  It was built in 2006, and it sold for $480K in 2007.  The actual opening bid is $408K, and this would be a good end-user property because the market value is $525K plus.  It’s not a “flip” property, but it’s a great deal for an end-user who wants 20% off on a nice house.

Our “Cheapest Home of the Week” is located in south Renton, near Shadow Lake (which is south of Petrovitsky Road), and it’s property ID 124646.  You would want to tear it down, but it’s actual opening bid is only $99,381.37 and its market value is over $275K!  The 2 bd/1 ba, 830 sq ft home, located on a 15,875 sq ft lot, is occupied.

In Covington, property ID 644942 in the Timberline Estates (one of the most affordable areas in King County) would make a great rental house.  It’s got an actual opening bid of $164,599.18 and it’s worth almost $225K.  It’s an 840 sq ft, 3 bd/1 ba home on a 5,132 sq ft lot, with $3,700 in property taxes that are owed, but it’s a really good buy to keep as a rental and hold. 

In Seattle, near Skyway, property 1288961 has an actual opening bid of $344,845.12. This 4 bd/2 ba, 2,600 sq ft duplex on a 12,420 sq ft lot, is a moneymaker–as Kristian said, it’s an “absolute screaming deal”.  It sold for $300K in 2003.  Although its market value didn’t appear on its listing in ForeclosurePoint, Kristian told us that no duplex in Seattle has a value under $400K.  This property would make for a very easy rental.

Located in Pacific (which is south of Auburn), property 1288960 is vacant and relatively new at just 3 years old.  The actual opening bid is $284,750, which is a good price, since it sold for $288K back in 2005 when it was new.  Its estimated market value is over $340K. It would make for a great rental and it’s a in good condition–this 3 bd/3 ba, 2,046 sq ft home, on an 8,060 sq ft lot, won’t need maintenance for a long time. 

In Bellevue, property 1244224 is a 3 bd/2 ba, 1,052 sq ft condo in the Oasis complex.  It’s a nice unit that has been nicely remodeled with some views.  The neighbor paid $440K for his unit just 2 months ago, and property ID 1244224 has an actual opening bid of just $321,958.  This is a ground floor unit, but keep in mind that the builder didn’t put hard floors in the top units, which means you won’t hear a lot of noise from the units above you.

Located in the coveted Clyde Hill area of Bellevue, property ID 1288956 prompted our agents to comment just 3 words–”Neighborhood, neighborhood, neighborhood!”  This 4 bd/2 ba, 1,670 sq ft home on a 8,152 sq ft lot is just 2 blocks off of Bellevue Way.  You could tear it down and build a big mansion like your neighbors.  The market value is over $725K, and the actual opening bid is $666,147.86. 

You can’t go wrong with property 11881 in Seattle!  It just had a $300K drop bid!  This 4 bd/1 ba, 1,280 sq ft home on a 4,000 sq ft lot, has an estimated market value of $463K, and its actual opening bid is just $340K.  It would make a great rental.  You would want to repaint the home, and you might want to consider doing some work on the unfinished basement so that you could add 2 bedrooms down there.  You could rent out the house room by room, or just rent the whole thing to a family.  Because it only has 1 bathroom, you would want to put in another bathroom, so you’d need to budget $15K-$20K to do so.  Seattle is an easy place to rent–if you owned this house right now, you could put an ad on Craig’s List tonight (Thursday) and you’d have renters by the weekend. 

An example of Craig’s List being a valuable tool for owners of rental properties recently occurred.  One of our investors purchased a 5 bedroom house in Seattle’s Ravenna neighborhood, and then he put an ad on Craig’s List to rent it out.  The ad was placed at 11 AM and by 3 PM, he had a renter for $3K/month!  One week later, he was still getting contacted by people who had seen his ad, and they were willing to pay even more than the original renter, so he kind of wished that he had waited a bit longer to see what kind of offers he could have gotten.

Property ID 183784 in Des Moines just had a $70K drop bid.  The actual opening bid on this 3 bd/2 ba, 2,300 sq ft home on an 8,750 sq ft lot, is $298,558.  The house is worth over $400K!  Three years ago, it sold for $329K.  It has a partial view of the water in the distance and it’s one block from the new high school.   The previous owner is a good guy and you won’t have any problems with him.

Property ID 1244182 in West Seattle doesn’t have a big equity spread, so we didn’t cover its details in the investors’ meeting.

Property ID 4513 in Renton is a deal!  Its actual opening bid is $143,273.20 and it’s worth almost $300K, which means its actual opening bid is $150K below market value!  The home is 3 bd/2 ba, 1,290 sq ft and it’s on a 4,530 sq ft lot. 

That concluded the highlights of the King County properties up for auction on Friday, May 2nd, and after that, we proceeded on to review just a couple Snohomish County homes, presented to us by Richard. 

In Monroe, property ID 133012 has an actual opening bid of $385K and a market value of over $575K!  It’s an “absolute screaming deal”, according to Kristian, and this is a beautiful 3,203 sq ft home on a half-acre.  It’s got 4 bedrooms and 2.5 bathrooms, hardwood floors, ceramic tile, wall-to-wall carpet, vaulted ceilings, etc., etc. 

The very last property we covered was property ID 214331 in Bothell, which was built in 2004, so it’s virtually brand-new construction.  This 3 bd/3 ba, 2,734 sq ft home (on a 4,356 sq ft lot) has an actual opening bid of $365,490, with a market value of almost $500K!  Property taxes are delinquent, however, so you’ll need to take care of those after buying the home at auction. 

After the meeting, Matt encouraged the investors and their guests to approach any of our agents to discuss properties that they would be interested in buying at auction.  Remember that we are happy to schedule one-on-one meetings with you, as well. 

Bid sheets were distributed to those people interested in placing bids at the auction, and we were reminded that you can place bids on several properties without having to actually buy all of them. 

You’ll need to bring your cashier’s check to the auction, and we’ll help you figure out who to make it out to.  If you need cash, we can get that for you, but if you’re trying to get that done the night before the auction, that’s very hard to do unless you’re able to put up a significant amount of cash down, but even then, it’s still difficult to get financing at the last minute like that. 

Here at Real Estate Investment Firm, we love what we do–we love to work for you and with you.  The more educated you are, the more intelligent decisions you make, the more money you make, and the more homes you buy.  We believe in what we do.

Don’t forget to attend our Tuesday educational meeting, held this Tuesday, May 6, when we’ll learn how to use self-directed IRA’s to invest in real estate!