Foreclosure in Denver>Question Details

Kristine, Home Buyer in Denver, CO

We're thinking about purchasing a 4 family in north Aurora. Concerned about prices in the area.

Asked by Kristine, Denver, CO Tue Nov 20, 2007

The 4 plex was sold in previous years for $260,000-$330,000 (2003-2005). It is now listed under $200,000. It is bank owned and needs some work. Obviously banks are trying to sell their foreclosures, but that seems like a huge price difference. Would you attribute that to a bank really wanting to sell it or to the neighborhood prices really falling??
It is located around Chester and Colfax.

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4
I agree with the first answer from Tim. Every investment is nothing more than a numbers game. If the ROI and cash flow are attractive enough, and your initial repair/upgrade spend is low enough then this property will work for you. Now is not the time to be purchasing an investment property that is contingent upon future market conditions. I would be more concerned about the rental history and average rents in that area rather than neighborhood prices falling. Many of the most attractive rental properties are in the least attractive neighborhoods. Good luck.
Web Reference: http://www.realasave.com
0 votes Thank Flag Link Wed Nov 21, 2007
Every bank and asset manager is operating under different guidelines, no two seem to responed the same or price the same. THe more important questions that I would consider are:
What is the condition of the property?
How much work and money will you need befor you can start renting?
Whats the ROI and or Cash Flow?
What are the average rents in the area?
how does this property fit into your investment model?

You are looking in the right areas due to the redevelopment and the proximity to Fitzsimon. It just dependends on how th numbers work for you. If you have more questions? Don't hesitate to Ask!
Web Reference: http://www.HUS-PRO.Com
0 votes Thank Flag Link Wed Nov 21, 2007
I agree, when it sounds to good to be true, why? It is possible the bank is motivated, highly unlikely. The bank wants fair market value. The stock holders don't like it when the bank sells the notes .60 cents on the dollar.

A previous owner (investor) could have gotten a fluffed up appraisal on a previous sale/refinance. We've seen a lot of mortgage fraud in CO, and after a little digging sometimes the previous sales records on the property begin to stink. Again, a broker could help snoop this info out by comparing MLS records to public records.

The property could have been poorly taken care of or partially destroyed by a previous owner and needs lots of repairs. You'll just have to go see it and see if this answers the big why.

I've been seeing quite a few properties being dumped by banks and wondering how do they decide which ones they'll hold onto forever at top dollar and which ones suddenly they have a change of heart and dump .60 cents on the dollar???? I look at foreclosure rates and declining values specific to an area when a bank 'dumps' a property because you better believe they do their research and they wouldn't dump if they could recoup their money.

Ultimately, you are going to need someone to do a lot of research specifically on this property and area, so find a good broker.

Great question.
0 votes Thank Flag Link Tue Nov 20, 2007
I would take a look at it. It seems like a good deal. There are some good deals out there. it sounds like the bank is going to unload these homes.
Let me know and I will take you over there.
Brian
Web Reference: http://www.kennaandco.com
0 votes Thank Flag Link Tue Nov 20, 2007
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