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I'm thinking of buying a foreclosed home at auction to flip and live in. Below is a link. It says debt is $130,650 So I'm assuming I will owe that along with the purchase price? And homes next to it are going for around $210,000. What is your opinion on this house as a fixer upper?
At Sheriff's auctions in Indiana, the property is almost always bought by the lender, for the stated debt amount. You can bid higher if you want, but what they are doing is just a step in the foreclosure proceedings, getting title to the property. If you make a higher bid and buy it, yes, you have to pay off the mortgage. The only bargains in Sheriff's auctions are when the mortgage is nearly paid off, so the debt amount is far below the market value. Flippers (from all over the country) look for these and bid up the price.
Buying an auction house you can't look at that is occupied by hostile tenants you will have to evict after purchasing? That's a pretty risky venture. No telling what the inside is like... and those tenants can do a lot of damage on the way out.
Let me correct one thing. If you make a higher bid than the mortgage lender, the Sheriff will pay off the mortgage from what you pay him. Yes, you are paying the debt, but not in addition to your bid.
I'm thinking of buying a foreclosed home at auction to flip and live in. Below is a link. It says debt is $130,650 So I'm assuming I will owe that along with the purchase price? And homes next to it are going for around $210,000. What is your opinion on this house as a fixer upper?
Don't know much about foreclosure auctions, do you?
You pay the auction price in cash within 24 hours. You likely will have to put up some cash just to be allowed to bid. There may be people bidding against you that will drive the price up. If you don't have the cash you'll need an iron-clad irrevocable letter of credit from a bank so you can get the money immediately on winning the auction.
There are a lot of other pitfalls.
I have to tell you, I'm an old pro at buying and selling houses for myself but property auctions scare the dogpiss out of me.
I refuse to do business with Auction.com because their terms and conditions are unacceptable. For one thing, they require a substantial cash deposit in advance of the auction and do not provide any form of contract. Just send them the money. No, thanks.
However, they do advertise Sheriff's sales which are not conducted by Auction.com. The county website will have links to the sale and will specify what forms of payment are acceptable, and what the time limits are. As I said, it is rare that someone other than the mortgage lender buys the property, since the minimum bid is the unpaid amount left on the mortgage.
Take a look at: https://legacy.sri-taxsale.com/County/Delaware
You can get an abandoned house in Muncie, Indiana for $500 -- if nobody bids against you. Auction next Tuesday.
I'm thinking of buying a foreclosed home at auction to flip and live in. Below is a link. It says debt is $130,650 So I'm assuming I will owe that along with the purchase price? And homes next to it are going for around $210,000. What is your opinion on this house as a fixer upper?
I would be very careful with this. You will have no idea how much you're going to need to do in repairs until you own it. What if it needs $60,000 worth of work to be livable? Do you know how to do repairs yourself? We bought a HUD home that was a foreclosure that had been vacant for a year. The bathroom didn't even have walls. That room alone cost us probably $15,000 or more, and that's with my fiance being a tile guy and one of his bff's a general contractor. We also needed a septic system, which have to be above ground here and cost us $23,000. We need a new roof but are putting that off as the septic was more important.
Our house was in fairly good shape for a foreclosure, because HUD does not let their homes fall into disrepair. All the other foreclosures we looked at were in terrible shape and would have cost upwards of $50,000 to make code. And you can't even look at this one.
More importantly, our home purchase price was less than 50% of it's appraised value. We already have equity after a year and our most recent appraisal was over twice what we paid.
Even more important, it's a house and location we love. I wouldn't buy any home that you will have to live in until you fix it up and sell it unless it's a home you will be happy in, because you may have to wait to build equity. It doesn't sound like it's worth that much more than asking bid in your description.
I can tell you we would NOT have bought this house if someone were still living in it. One of our neighbors lost his home at auction (he had been living there without paying for a long time), and even though it's his fault, he is angry. He isn't going to go anywhere till they come and force him out, and I would be very surprised if he doesn't damage the home even more out of spite. As it is, the person who bought it will have to put in that $23,000 septic system and a roof to boot immediately, but I'm sure he stopped maintaining things a long time ago. Plus I'd be worried he'd make us the target of his anger. I just feel this is more for tougher people who know how to handle the many issues that arise in buying an occupied foreclosure.
I'm thinking of buying a foreclosed home at auction to flip and live in. Below is a link. It says debt is $130,650 So I'm assuming I will owe that along with the purchase price? And homes next to it are going for around $210,000. What is your opinion on this house as a fixer upper?
This listing is a house occupied .
Are you well versed in eviction process in Indiana?
You may need to spend money on a lawyer or at least a sheriff serving papers, possibly court costs- which can “ drag”.
You won’t be even able to visit “ your” house.
The debt amount is “ estimated”- you have to do due diligence to know for sure.
Don’t forget the substantial money you pay as a Buyer to an Action house
Then renovation costs. Not worth it in this price range imho
Just find a “ as is “ house for sale- fixer upper - you would be better off.
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