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Can someone PLEASE share their real exp in buying a short sale home ,repairing and renting it?

can someone share their real exp in buying a short sale home ,repairing and renting ( as an out of state buyer depending on asset management ) it in prime cities that are now hit by recession.
What are the challenges you have had. the pros and cons.
If you can share your actual exp that would REALLY help
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August 23 2009 - Detroit
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Answers (2)

Profile picture for FERMI
SIEGER007-
Are you looking to finance the home or pay cash? If financing, you already have a problem. Buying a home that needs repair with investment property financing will probably not happen these days.

If you are paying cash, then the short sale process varies widely. Some lenders are fairly quick to respond, others are slow and obtuse. Rely on an experienced realtor to help in sorting that out.

One more thing, buying a home out of state adds more risk. You set yourself up to be ripped off if you aren't able to drive by the property from time to time. How do you know if it's rented or vacant? How do you know if it really needs a new furnace? Keeping it closer to home is usually good advice on rentals. 
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August 25 2009
Oh my gosh, a short sale can be a lengthily process. As you know, in a short sale, the lender accepts less than is owed to satisfy the loan. If the seller doesn't inform the bank they are listing the property for a short sale, the process can take several weeks to a couple of months. First the seller has to establish a hardship and prove that they cannot afford to make payments on the original loan. Then the bank has to obtain a brokers price opinion to arrive at a fair market value, then they will have their own appraisal done. Keep in mind that this is not the only property that the banks asset manager has on his desk. Hopefully the seller has worked all of this out with the bank PRIOR to listing the property.

Okay, you like the house and write a decent offer. The seller accepts and signs the offer and it gets turned over to the bank. The bank accepts the offer and it's a sale like any other sale ... you own the house. Once it is yours, you can repair it, rent it, move into it or sell it. With many people loosing their homes, there seems to be a sufficient amount of renters because the rent is often less than they mortgage payments they had before. I don't know if I would be comfortable owning properties in another state that I was renting out ... just my personal opinion. The eviction process might even be longer than the short sale process.

There are some fantastic values in our local market. Foreclosures seem to go for less money than the short sale properties. From what I have seen, the short sale properties seem to be in better condition because the owners are still living in them and keeping them up. Some of the foreclosed homes are trashed ... sometimes all of the plumbing and light fixtures are gone ... one even took all of the kitchen cabinets and furnace!

Hope this helps you some.
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August 23 2009
 
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