This house is a forclosure....if I do end up getting it..(should know by sunday) I will make a killing when it comes time to sell it

 

Only way to do it. Are you handy enough to make the fixes it'll need?

I did the same thing. Looking at making 100K on mine when the market gets better.

 

:Yeah Im a Union Pipefitter/plumber so if i dont know something, I work around someone that does know. The houses in the area sell for about 130 to 150K Im buying this one for 60K plan on putting about 10-15K in it and live there for two years (so I dont have to pay capital gains) then sell it between 130-150. Sounds simple enought

 

LOL, I'm no pipefitter, but I'm like you, I have a bit of a network so if I don't know how to do something, I know someone who does, or I know someone who owes me a favor who knows someone who does. lol.

FWIW - I dont think you have to pay capital gains if you turn around and put that money right back into another house. At least, that's the way it was explained to me.

 

thats the way to go now and probly for another couple years before the market bottoms out
the county north of me has an average of 1200 repos a month and property values have dropped 30% in places
I have two lots I reduced over 40% and have had no lookers

 

Well I got some bad news. The way this thing was supposta work was kinda like ebay. Place a bid and if your the highest bidder by sunday at noon its yours. You can see the other peoples bids. My realtor just informed me that, she just found out that this one will be a sealed auction. GREAT!!! Now I really dunno what to do. I guess I need to place a bud for the most I wanna pay for it and see what happenes. AHHHHHHHHHHHHHHH!

 

So buy a lot and build your own. Not all that hard to do and you have instant equity and a feeling of real accomplishment.

 

the way that my boss(construction company owner)explained the tax deal is say you buy a house and mak improvements on it, or build one, then in two years you move out and up to 250k of the profit is tax free for a single person, and if you are married it is up to 500k. my boss has lived in 7 different houses in 11 yrs, and the one that we are building right now he says he will be staying in for a while, only time will tell.

loven7.3 i hope this deal goes through for you, sounds like you are really excited about it. good luck with your hopefully new purchase.

Austin

 

Thats correct, as long as you invest it in something bigger, I believe you can avoid Capital Gains. Not here in Canada though.

 

Zach, one of 3 things will happen in an auction. You won't get it. You'll pay more than you could have, or you'll get a great deal. If you really, really like THIS house, bid as much as you're willing to pay.

If you're looking for a great deal, start paying attention to all the auctions until you get a feel for the auction market so you know what to bid. There are people out there who make a living buying auction houses at the right price, so it will take some knowledge to be the successful bidder.

The other option is to bid low, then immediately contact the successful bidder and offer 5K more than he/she paid for a quick sale they can turn a profit on. It all comes down to finding the right house.

Lot's of folks financed homes they couldn't afford, so you'll see a lot of foreclosures until the market corrects itself. This is a great opportunity for someone who has their finances in order. I'm sure you'll find a house, even if this one is not it. Just don't bite off more than you can chew.

I don't see the big chance part though. No point in paying rent when you can be building equity. Good luck.

 

Excellent Advice Chris!!!!

 

I agree with everything you said Chris. I would DEFINITELY avoid the auctions. You want to be in the position where YOU have the upper hand, and where YOU make the rules. ALSO...if this is a blind "as-is" auction where you are unable to perform inspections, I would most definitely make haste in the opposite direction.

Here is the best course of action in today's market. 1) get financed through a good loan company. Get a good rate, and find out about all of the first time buyer programs they have out there. When I bought my house, I paid no closing costs, no money down. I actually got money BACK at my closing (what remained of some $500 earnest money). I bought a bank-owned foreclosure and got into a Fannie May program. I have a great interest rate.

Banks are not in the business if owning houses. They are also not in the business of trying to sell them, either. They suck at it. Usually this is where you'll get your best deal, and you have the upper hand. With my house, all the plumbing needed fixed. So we agreed on a price, and I told them I'd walk unless they fixed the plumbing. I bought a 190K house for 125K and got them to make a few thousand dollars worth of repairs before I even moved in.

In the period of 6 months I was looking, I probably looked at over 200 houses. Some were nice, some were super scary. My realtor still jokes about the "cat house". Whew was THAT scary. I probably put 6 contracts on houses in a matter of a month, and was bid out on each one of them before I finally ended up with the house I have...and the only reason I got the house I have..the people who were going to buy it went to closing and their loan fell through at the last minute, and the bank was tired of hassling with it so they begrudgingly accepted my low-ball offer.

Don't give up, do your research, get pre approved, get a good rate, find a good realtor, look at a bunch of houses. Eventually, one of them will work out for you. Also don't pass on your inspection, it's very important. Like Chris said, people get into homes they can't afford, get foreclosed on, get upset, and do things like pour concrete down drains.

Just some quick advise from someone whose been there. Good luck!

 

Zach...Goodluck man. Hope You get it. TYhere is nothing like owning Your nown Home. Or at least Buying one. Keep us posted.

 

Thanks Chris and Lisa for the advise.

 

Good advice Chris and Lisa. There are a lot of differences in buying real estate in our two countries, but some things remain the same.
The big one is Due-Dilligence. Do your homework on a purchase this big and for what may be the biggest purchase of your life or for a positive cash flow investment. Check out everything, have it inspected, do market research comparisons and like Lisa mentioned, check out atleast 100 or more different homes.

Don't be scared to put in low offers too. You can always have an exit strategy with your "subject to"s such as subject to financing, inspection, or my personal favorite "business partners approval."
Your business partner can be your wife who doesn't like the color of paint in a room or your dog, who doesn't like that there isn't a fire hydrant in the front yard. No one knows who the business partner is, and allows you to just simply change your mind while sleeping on it. Good luck.