Tag Archives: investment

Deals in Bankrupt Subdivisions?

Thursday, 03 September 2009 09:50

Written by Lane Bailey

1 Comment

: Image by Getty Images via Daylife

I recently took some buyers out looking at houses in an area with a lot of bankrupt subdivisions. The houses were, in many cases, quite attractive and priced very competitively.

But there are a lot of considerations that buyers need to weigh before buying a home in a subdivision where the developer has gone out of business…

We’ll start with the dangers…

The amenities may not be complete… and they may NEVER be complete. If you are buying a property because of the pool or tennis facilities, and those items aren’t there, they might never be built.
There is NO telling what might be built on the currently vacant lots… The bank that gets control of the lots wants to SELL them. And they likely aren’t going to quiz the buyer as to their plans for the neighborhood. Your 5,000 square foot home could get a 2,500 square foot neighbor.
Warranties may just fly out of the window… Defunct builders won’t be around to honor warranties, and the bank that sells the property isn’t going to warrant the builders work. Also, since the builder may have had financial pressures while the were building the homes, the quality might be challenged.
Important items like HOAs and CCRs might not have been assembled… This can be remediated by the residents… maybe. The residents can form a Home Owners Association (HOA) and put together Community Covenants and Restrictions (CCR), but depending on the local laws, might require 100% of current residents to enact.
The community might have a stigma… from having been bankrupt. This could affect future resale value… especially if the community isn’t built out completely.

But there can be a reward…

Price… That is the real draw. One might be able to buy in a community and type of house that could otherwise be unattainable.
Opportunity for appreciation… If the neighborhood turns the corner and gets built out appropriately, the reward could be higher than average price appreciation. Buying under-priced property and then selling at market is a good business decision.

Do the math!

While searching for a home, make sure that the home meets your needs… and the neighborhood meets your needs… AS IT IS. Also, don’t forget to weigh the risks. What if smaller homes are built in the neighborhood? What if there are no amenities? What if the guy next door is able to build a tar-paper shed in the back yard?

For some buyers, these properties represent a GREAT value. For others, they represent a big risk. By honestly examining lifestyle and options, one can determine if a home in a bankrupt subdivision is a good value for them.

Strange People… muttering… muttering…

Tuesday, 01 September 2009 23:56

Written by Lane Bailey

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Have you ever hung out around the County Courthouse on the first Tuesday of the month?

Outside the Hall County Courthouse The County Courts CAN make for some great people watching on any day of the month (ok, any weekday…), but the first Tuesday on the month here in Georgia is a little more special. There are deals to be had… property deals.

OK, maybe there are deals to be had. Honestly, there wasn’t much action on the foreclosure auction front… but I’m getting ahead of myself.

The the tax record on the County’s website said that the sale would take place at 8:30am…

First up were the tax sales. They started a moment after 10:00am. There were six parcels to be auctioned off. Five of them sold… and might have been good deals. The final property was unable to attract a bid, and there were a few chuckles from the assembled thirty or so people. None started above $1500 (except the last one) and the final bids ranged from just under $10,000 to just under $30,000… I wasn’t there for those properties and hadn’t done any background, so I don’t know if they were good deals or not…

A few minutes later, some attorneys started showing up for the foreclosure auctions. The banks involved had predetermined their minimum pricing.

Each lawyer would stake out his spot and begin “the chant.” It consisted of the legalese that they were required to read before accepting bids. They were quietly “speed-talking” the required verbiage in their own space… bidders wanding near to try to figure out which property they were representing. They would each briefly mention the address of the property and the tax ID… before anyone knew what they were doing there.

It was largely the same crew of bidders, even though there was no actual bidding…

Mr. Bored This guy would mention his bid as if it was bothersome. As he was outbid, he would slightly top the new bid… trying to sound like he would rather be anywhere but here…
Miss Aggressive She actually punched the air with several of her bids. It was funny as she outbid Mr. Bored… the juxtaposition between her excitement and his “duty to respond”…
Mr. Business He effectively combined boredom and excitement… It was obviously a duty for him to bid, he seemed to not care about the outcome. At the same time, he was quick to react…
Mrs. Pre-occupied Perhaps she couldn’t be bothered to bid. She would bid… but it just seemed that she was annoyed that the auctioneer expected her to stop her other conversations to pay attention…

In the end, I’m sure I missed some of the sales. There were anywhere from 2-7 lawyers chanting at any given time. But the one thing I did notice… nothing was sold. One of the properties that I was familiar with was going for something between two and a half and three times what it would fetch on the open market…

Deals DO come up at auction. But, you have to know the properties and what you are willing to spend to get them… BEFORE you get there. And you have to know the players… who will be auctioning off the property.

from Gwinnett Garage Guy

Legends of Parkview – Luxurious, New, Bank Owned…

Thursday, 30 July 2009 12:24

Written by Lane Bailey

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Back in February, 2008, I attended an event for agents at Legends at Parkview. At that time I was impressed with the quality of the homes offered in the community. I was also impressed with the philosophy of the builder, Sean Mayfield of Mayfield Homes. I also liked the style of the homes, and the layouts were quite nice.

The problem was that they launched the community just as the market was collapsing around them. And while they were strong at the time, it didn’t last…

This premiere community has slid into foreclosure. The remaining homes (there were 8, now there are 4 left) and the lots are all for sale by the bank. So, now is the opportunity to buy into a luxurious community at fire sale prices… bank-owned prices.

Three of the properties are built on a basement, all have 3 car garages. One is a 5 bedroom/4 bath, and the others have 4 bedrooms/3.5 baths.

The properties that are currently available are priced at:

The Waterford on a basement – $563,400 $489,900 5br/4ba
The Addison on a slab – $589,900 $439,900 4br/3.5ba
The Addison on a basement – $614,900 $479,900 4br/3.5ba
The Victoria on a basement – $735,000 $524,900 4br/3.5ba

As an aside, I really like the Addison. It has an exceptional garage. Aside from the spaces for 3 cars, there is about an 8′ wide area along one side that would be perfect for motorcycles and/or tools.

Obviously the prices are pretty well discounted for the remaining units in the Legends at Parkview. There aren’t that many opportunities to jump into this level of luxury in a bank-owned new home community. The foreclosures have really pushed the prices down here… They have sold 4 homes since June. These will sell before long… There were several buyers coming in to visit while I was there… on a Wednesday afternoon.

from Lane’s Active|Rain blog.

USA Today tosses some props at Gwinnett

Saturday, 18 July 2009 23:55

Written by Lane Bailey

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: Image by Getty Images via Daylife

USA Today had a story recently about suburbs… It is an interesting read. It would have been interesting to see the direction that the growth would have gone if we hadn’t had a financial system meltdown and real estate bubble burst…

Gwinnett has a very diverse population, and the article was talking about Asian influences and how it affects density. From China’s urban centers, to Japan, Korea and other areas, Asia has populations that are located in more dense areas. Much of the capital and demand for the projects are coming from Asia, and so it makes sense that the projects reflect those influences.

We are talking as much about architecture as we are about population density… things like high-rise buildings. Currently there aren’t a lot of high rise residential buildings in Gwinnett… or commercial for that matter. There are some developments, Suwanee Town Center comes to mind, that are mixed commercial and residential and are 4 to 5 stories… but the proposed projects are more along the line of 25 stories or more.

Gwinnett has a tremendous potential. There are great schools, lots of businesses (including some pretty major company headquarters) and excellent transportation options.

It will be fun to see how this might unfold in the future.

Get out of your mortgage for FREE?!?

Wednesday, 08 July 2009 18:32

Written by Lane Bailey

1 Comment

: Image by Getty Images via Daylife

Probably not…

But that doesn’t mean that people aren’t trying it… and it doesn’t mean that people aren’t getting in trouble for it.

Here is the way it works (and it all sounds so legit…):

Mr. and Mrs. Consumer buy a house and get a mortgage from MonsterMegaMortgageCompany (MMMC).
MMMC sells their mortgage to Investor Pool #1.
Then it is bundled and sold to IP#2… and #3 and #4 over a span of a few years.
Mr. & Mrs. Consumer start having problems, and despite everything they are facing foreclosure.
To try to get help they contact a “Foreclosure Mitigation” Law Firm that fights the foreclosure by filing a “missing title” lawsuit.
The law firm (or other entity) charges an up-front fee (maybe $2000) and then monthly fees (maybe $1000 or $1500)… as well as a contingency fee upon settlement of either 50% of the reduction or 75% or 80% of the value if the mortgage were completely eliminated.
After stringing along Mr. & Mrs. Consumer for a few months or longer (collecting fees), they fail to actually prosecute the case.
Mr. & Mrs. Consumer lose their home…

According to a few of the sources I looked at, their are no recorded examples of any suit of this type EVER being resolved in the consumer’s favor.

The basis of the lawsuit is that if the mortgage holder can’t produce the documents from the mortgage, it will be set aside and the consumer will own their property free and clear. Sounds nice, huh?

Before getting sucked into something like this, here is a little more reading…

Source 1

Source 2

The State of California is going after one of the firms involved in this practice. I would expect that there are similar cases in other states.

Times are tough… scamsters know it, too

People being foreclosed on are all over the place. They are vulnerable to people that approach them to “help.” There are a variety of scams and plans that mostly just revolve around generating a profit for the “helper.”

Be careful! There is help for many home owners that are in trouble… but the easy sounding solutions often aren’t what they are cracked up to be. If it sounds too good to be true, it likely is…

I would love to lose my mortgage, too… but this isn’t the way…

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Tag Archives: investment

Deals in Bankrupt Subdivisions?

We’ll start with the dangers…

But there can be a reward…

Do the math!

Strange People… muttering… muttering…

Legends of Parkview – Luxurious, New, Bank Owned…

USA Today tosses some props at Gwinnett

Get out of your mortgage for FREE?!?

Times are tough… scamsters know it, too

Custom Listings

Browse Listings

What's YOUR Home Worth?

Follow Me on Pinterest

Tag Archives: investment

Deals in Bankrupt Subdivisions?

We’ll start with the dangers…

But there can be a reward…

Do the math!

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Strange People… muttering… muttering…

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Legends of Parkview – Luxurious, New, Bank Owned…

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USA Today tosses some props at Gwinnett

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Get out of your mortgage for FREE?!?

Times are tough… scamsters know it, too

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