If I were given the opportunity to grow $150,000 through purchasing foreclosed real estate at foreclosure.com, how would I grow this investment? Having watched my family purchase and sell their own real estate, I have seen firsthand the value and profit potential of buying foreclosed properties. In the current economic environment; I have also seen the benefits of being creative when it comes to selling these properties. My strategy would include targeting my purchase based on final retail sales range values, rehabbing the property to prepare for sale, owner financing the property to a qualified buyer while allowing for continued growth of the principal.
I would concentrate my efforts in a 20 mile radius of my hometown of Franklin , Virginia . This would include Franklin , Southampton County , Isle of Wight, and the western portion of Suffolk , Virginia . The economy has been cruel to this area over the past few years, added with the closing of the area’s largest employer, International Paper. This mill has been in operation since the late 1800’s and has been the backbone for the entire local economy. The closing has added to the increase in foreclosed and distressed homes. The absence of the mill will enable Franklin to become a bedroom community of the Greater Tidewater and Richmond areas, I believe the area is poised for growth.
I would first target single family homes in the final retail range of $100,000 to $150,000. I have chosen this range since this would provide a greater advantage to find a qualified buyer. I would target homes in a middle class neighborhood with minimal to minor repairs needed. The house would be structurally sound with no major damage inside or out. I would target those homes whose pricing has reached a distressed value of 60% of its assessed value, and whose comparables are of greater inequities. Some examples of such targets include:
1070 Johnson Circle , Franklin , Va. ( Isle of Wight County ). This house was built (rebuilt after fire) in 1987, contains 3 bedrooms, 2 baths, brick construction, with .5 acre of land. Only minor facial repairs were needed. This foreclosed home sold for $55,000 in 2009. It was assessed at $125,900. The comparables for houses recently sold on the same street ranged from $160,000 to $212,000.
22327 Robertson Street , Courtland , Va. ( Southampton County ). This house was built in 1996 and contains 3 bedrooms, 2 baths, and in a very desirable neighborhood. Only minor repairs to the interior fixtures, painting the interior walls, and replacing the carpeting were needed. This foreclosed home sold for $63,000 in 2010, and was assessed at $113,800. The comparables in the neighborhood range from $129,000 to $225,000.
9154 Turner Rd , Drewryville , Va. ( Southampton County ). This is a manufactured home built in 1998 and contains 3 bedrooms, 2 baths, with 2 acres of land. This foreclosed home sold for $24,000 in 2011, and was assessed at $72,500. No known repairs needed....