Foreclosure in San Diego>Question Details

Monica, Home Buyer in San Diego, CA

Hi, I'm interested in buying a foreclosure. I have about 50K sitting in my savings account.

Asked by Monica, San Diego, CA Mon Apr 14, 2008

I only make about 45K a year, no car payment, no debt. How does it work.... I see houses for under 100K in the foreclosure listing. Can I afford to buy one of these? How does it work if I found one for 100K (for example)?

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When the home is listed for $100k and you are going to put 40k down that would give you a great loan rate. However the first thing you should do is talk to a experienced lender who will run your credit and see what loans you can be approved for.

In this current market the rates are still very low, but according to my lender it's very important to have a low LTV (loan-to-value-ratio). That means low debt. Also the more you put down the better the rate on your loan. It sounds like you have very little debt. Once you speak with a lender you will have a better idea of what you can afford.

When purchasing a home you want to understand why you are buying the home. I have clients that are buying just for investments reasons so the neighorhood and schools aren't as important to them. What matters to them is how homes rent and want for, and whether they neighborhood will see a growth.

My clients who are buying to live in are more concerned with noise in the nieghborhood, convenience to shopping, flooring, floor plan, schools, community. So Monica it really depends on why you are buying, where you should looks.

You could probably afford some of these foreclosures, but are they in the nieghborhood you want to live? Speak with a lender and see what you can afford and that might give you more options. With no debt and a good job you will be suprised.

IF you need any other information on Real Estate in San Diego County, please visit my website at
2 votes Thank Flag Link Mon Apr 14, 2008

That's a very good question and one that is very relevant for the current San Diego market.
The first thing to get clear about is WHY do you want to buy a foreclosure?
1. Are you a home buyer looking for a personal residence? In that case WHERE you buy a foreclosure will make all the difference for WHAT community you'd like to live in.
2. Are you an investor looking for cash-flow investments, fix & flip or possibly lease option deals? In that case my recommendation would be to look for properties in solid locations, with strong local jobs and infrastructure to support holding the property for at least 3-5 years. With 10--20% down and a 30yr fixed mortgage you can find properties in certain markets that will rent for roughly what your expenses are. These deals DO exist in San Diego at the moment. Make sure you'll have a reserve account set aside with at least 4% of the sales price for any unexpected costs of ownership like vacancies, repairs and such.

Like many of the good people on Trulia will tell you - get advice from an experience real estate agent and lender about your personal situation. A thorough consultation and financial check up are in order before making any offers on any property in any market. Feel free to use this website to search, sort and save foreclosed, bank-owned properties in all of San Diego County.
2 votes Thank Flag Link Mon Apr 14, 2008
I work in Washington State, so the foreclosure laws are likely quite different than California's, but a few things I'd be on the watch for: know what the owner's right of redemption is. You don't want to buy a property only to find out the seller can reclaim it. Secondly, know what you're buying. Don't buy a foreclosure unless you've at least gotten out of your car to look at it. You never know when somebody has turned a property into a toxic waste site by manufacturing drugs. I prefer to buy REO properties vs those in pre-foreclosure or those at auction. You may want to consider this.
Web Reference:
1 vote Thank Flag Link Wed Apr 30, 2008
Will's answer is good. If you have $50,000 in cash and no debt, there are better ways to invest than by buying a foreclosure. In real estate investing, cash talks. As Will suggests, you can lend your money (as a private lender), with the loan secured by real estate. Or you can be more active.

Start by learning more. go to and click on "Real Estate Clubs," then find some near San Diego. Attend a few meetings. Keep your checkbook in your pocket (except for whatever admission fee--maybe $10-$20--you might e charged). Listen. Learn. Find out what the opportunities are.

Hope that helps.
1 vote Thank Flag Link Wed Apr 30, 2008
Don Tepper, Real Estate Pro in Burke, VA
If you could actually find a property to buy for $100k in San Diego that you would really want to own, then the first step is to contact a reputable mortgage broker to get you pre approved for the best loan that suits your financial plans. You can contact me for a referral for a great lender.

The next step is to find a realtor that your feel will work with you in your home search. I have access to the bank owned properties as well as the pre-forclosures. If you are truly buying a foreclosure, then you will need to pay cash only for the full amount... when a bank is foreclosing on a property they set a sale date for the property, you may or may not ever get to see the property, you may or may not get a clear title and you must pay cash. Buying a property in foreclosure is very risky. It is best to wait until the foreclosure happens then it is a bank owned (referred as REO many times). Contact me, I wil be glad to assist you.
1 vote Thank Flag Link Thu Apr 24, 2008
I have a few suggestions;
1)Mortgage Broker: Find out how much you are approved for. Then follow that up with how much you are willing to spend per month towards mortgage without having to eat cereal for every meal. If you need references, let me know.
2) Find an agent who knows the county well and who can help you navigate where you want to live and which areas have the highest re-sale potential based on location, etc. Seeing as how it being your first purchase you most likely will be wanting to sell and move up when the market and life conditions warrant the move.
3)Looking online is great. Not all sites are dependable. That is why having an agent who has access to upcoming foreclosures, knowing current foreclosures key, especially if you are first time home buyer! Buying a home is a great investment in your future, but it is important to have as much help and insight as possible to make sure the decision you are making is a postive one.
Good Luck to you!!!
If you need any help or more detailed information on the home buying process, let me know I would be happy to email some to you.
Alison Bell
1 vote Thank Flag Link Wed Apr 23, 2008
There are multiple bank owned and short sale properties in the San Diego MLS. You should have a Realtor experienced in finding them and a good lender that has pre-approved you for a loan. Once you know the amount you can afford comfortably, you can have the Realtor find some likely canditates. Be careful about foreclosures in San Diego under $100,000, if they are not listed properties. I run a free class on buying foreclosures, short sales and bank owned (reo) homes. See the front page of my web site for seminar information (note that the 22nd of April, class is full). I can give you some names for a knowledgabe and professional Realtor, lender, appraiser and home inspector. Let me know if you need more information.
1 vote Thank Flag Link Mon Apr 14, 2008
I don't see any where in Monica's post where she mentions that she wants to "invest." She says she wants to buy. I suspect that the reason she is listing her income and debt is that she wants to know if she can qualify for a purchase and probably wants to live in it.
0 votes Thank Flag Link Wed Apr 30, 2008
You could purchase a home the "traditional way", go to the bank, ask for a loan, put 20% down and pay closing costs. But since you are investing, I suggest you look at alternatives. Your $50,000 could go a lot further with the right techniques. My company is always looking to invest with others either by securing their money while you receive excellent returns between 9-14% or by becoming partners. If you're interested visit the website at

To your success,
Will Robles

888.605.9190 ext.3
0 votes Thank Flag Link Wed Apr 30, 2008
You can benefit from someones elses mistake, but you need to obtain the assistance of a Realtor to asnswer all of your questions and guide you into the right direction.
Alison Bell
0 votes Thank Flag Link Sat Apr 26, 2008
Before looking at a home you should really get a pre-approval from a mortgage profesional that can outline your Mortgage, Insurance and Tax payment on a home. If I can be of any assistance please give me a call and we can kick around some numbers.

Community Mortgage
0 votes Thank Flag Link Thu Apr 24, 2008
Dear Monica,
If you would like me to refer you to an agent that can help you to find a good property in your area, and a Mortgage broker to help you to find out what you qualify for, then please let me know. I would be happy to help you!
Take Care,
Selena McNeill, Broker
Century 21 Gold Country Realty
Bend, OR
(541) 390-0595
0 votes Thank Flag Link Thu Apr 24, 2008
The general rule of thumb is for a mortgage 2-3 times your annual income (assuming not a lot of other debt). In high cost of living areas like San Diego, it's usually 3 times. $135K mortgage at 6.125% is $820/mo. Factor in closing costs and reserves and you'd be looking at something in the $175K range. That being said, go get prequalified and get an agent to help you find a property.
0 votes Thank Flag Link Thu Apr 24, 2008
SO, I would have to have 60K in my pocket to buy a 60K foreclosure?? How can I buy a house and benefit from someone's mistake? What's they best way to get a discounted home?
0 votes Thank Flag Link Thu Apr 24, 2008
First of all I would contact a loan officer and discuss your current financial situation ie, income, expenses, taxes, credit score and work history and they will help you determine what you can qualify for before you take the next step. I will be happy to send you a couple referrals in your area. This is the best way to get your feet wet during this exciting time when considering your first house. Let me know if I can help. Sandra Zambito, Realty Executives 760-297-0826
0 votes Thank Flag Link Tue Apr 15, 2008
I think you may be reffering to listing for unusually low prices. If so, some of those refer to the amount of the loan forclosed upon, not the price of the property. That being said, yes, if you agree on a price of $100k and put down $50k, with all the cost that go with purchasing you'd probably have a loan for $55-60K. On a $45K/year job with no other debt this would be a really reasonable loan amount.

Good Luck.
0 votes Thank Flag Link Tue Apr 15, 2008
So.... if the place is listed for 100K as a foreclosure... that's my purchase price??? Even though it may really be a 300K condo or something? SO, I'd be putting $$ down for the 100K and getting a loan for say..... 60K?
0 votes Thank Flag Link Mon Apr 14, 2008
Hi Monica: Your first step is to check with a lender. The lender will check your credit and evaluate for which type of loan you would be most qualified. If you are a first time homebuyer, there are some loans just for 1st time home buyers. The amount of your down payment is something with which your lender can guide you. You want to be sure that you leave yourself some cash in the bank, as foreclosure usually need some deferred maintenance or repairs, as well as making sure that your monthly payments for the mortgatge, property taxes, insurance, as well as any homeowners due if any fit into your monthly budget. I work with several great lenders and would be happy to recommend them to you if you would like. Please contact me at 858-248-0863 for additional information. Good luck with your search...I am here to help! Maria
Web Reference:
0 votes Thank Flag Link Mon Apr 14, 2008
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