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Michael Neville's Blog

By The Live in Atlanta GA Team | Agent in Atlanta, GA

Foreclosure Steal....knowing how to recognize a true deal

So, after having helped a few people within a group of friends find ridiculous deals (seriously it was definitely capturing lightning in a bottle) - they referred me on to yet another friend in the extended crew.  He was also a first time buyer, but on an even tighter budget ....100k was the max.

He wanted a 3bed/2bath - in the City.  It had to be in decent condition & relatively respectable neighborhood.....so yes, it was the needle in the haystack scenario.

We searched for months and the search criteria in terms of location to include places outside the perimeter (OTP) was expanded as he realized how difficult of a task it was to find something that met that criteria.  The challenge continued to be that if it was truly low then cash investors would beat him out in multiple offer situations & if it was near the top of his price range in a good neighborhood there were usually residential buyers who’d outbid him in those multiple offer situations.

We even went under contract on a short sale but the bank came back with a ridiculous counter well above market value so we moved on.

Then, during my daily early morning routine of checking what foreclosures have hit the market in the last 24 hours in GAMLS (we have 2 listing services in Atlanta and the GAMLS is like the old Atari system compared to the FMLS which is more like the X-Box 360 of listing services…but GAMLS is known for having more foreclosures pop up that aren’t entered into both systems) BAM – it popped up. 

It was a foreclosure in East Atlanta…priced too high for most investors to turn it as a flip renovation, yet not priced like a foreclosure that most owner occupants would look at as “move-in ready”.  Better yet…….it didn’t have any pictures online for the listing – so most people automatically skipped right over it.

I was fascinated because it was the oddball & it was on the way to another foreclosure I needed to check for an investor client so I stopped by.  The house was completely boarded up (not because the windows were broken but because the asset management company wanted to prevent break-ins/vandalism …all the windows were intact.

I walked through the home and couldn’t believe it was in this good of condition for the price AND it had a huge basement with a GARAGE……that doesn’t happen much in the INTOWN neighborhoods of Atlanta, especially on classic brick ranches. My estimates were that the property needed about 15k in repairs….almost all superficial cosmetic components, with the home being structurally sound & systems fully operational.

I immediately called my client and said he needed to not only come see the house ASAP but we need to submit an offer that day – above list price with the seller paid closing costs he needed to net out exactly what the bank was asking….trying to get it accepted before anyone else forced it into a multiple offer situation.

The fact that this listing was on in GAMLS, had no pictures, and a price in “no-man’s land” kept it off the radar just long enough for us to get the offer accepted within 2 days.  (After we got the offer accepted numerous other offers trickled in to the listing broker’s office….but it was about capitalizing on the moment to take action & knowing what a true deal really looks like, even if there aren’t pictures to judge.

Buyers who have the flexibility to move quickly will be in the optimal position to take advantage of this market.

This Buyer paid only $76,000 on a 3 bedroom / 2 bath home that would retail in this market for easily $100,000 if it didn’t have the minor cosmetic issues & was marketed properly (in FMLS, GAMLS, & hundreds of other real estate media outlets).

I’ve done the same thing for clients in different price ranges, scooping up homes for 250k that should have realistically sold for 325k-375k, but it was about timing & what the buyer was willing to fix on their own after closing.  Homes with modest deferred maintenance can be an eyesore & bring down values substantially more than the cost of repairs, but there aren’t a lot of buyers who want to take on those challenges or have trouble getting approved for the renovation loans necessary to have them addressed.

It was so satisfying to make all of the work payoff with another 1st Time Homebuyer settling in on an incredible deal.

For assistance capitalizing on the opportunities in the Metro Atlanta market please feel free to call or email me & we’ll work hard to ensure you seize the moment

Michael Neville

404-310-8364

Mike@LiveInAtlantaGA.com   

Comments

By Rayleshia,  Wed Sep 1 2010, 23:40
Do you work in Lithonia, Covington or Marietta?
By The Live in Atlanta GA Team,  Thu Sep 2 2010, 08:12
Hi Rayleshia - I do handle some sales OTP. I'm closing something in Marietta next week actually - feel free to give me a call or email me @ Mike@LiveInAtlantaGA.com to discuss things in more detail. Thanks for asking
 
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