thequestionclub: Foreclosed real estate

When calculating expenses, it's also worth noting that in addition to paying a mortgage, you'll also be paying for home insurance and probably property taxes, which adds up (faster than I expected, actually).

Another thing I'd recommend is to budget REALLY high for necessary renovations/repairs. At least 50% more than what you THINK they will cost. Stuff like that always seems to cost more than you expect and it's probably better to be prepared and end up with leftover money than to come up short for a necessary repair.

Also, as I understand it, foreclosures aren't usually the type of house sale that can take forever, short sales (misleading name) are. In a foreclosure, the bank has taken possession of the residence and they just want it off their hands. In a short sale, the person who bought the house essentially owes significantly more on the mortgage than the house is worth and are trying to sell it, with the approval of the bank. So all offers must go through not just the seller, but through the bank as well, and EVERYONE has to agree on EVERYTHING, which is why it takes forever. With short sales, three months is FAST and a year is common.

I'd recommend seeing a real estate attorney and really doing a lot of detailed research about whether or not the repairs a foreclosure would require are completely within your capabilities. And when you find a house, getting a really good inspection is also super important.

I agree with the commenter who suggested buying and flipping now and selling in five years.

Source: http://thequestionclub.livejournal.com/106642658.html

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