House #25: More Details

July 25, 2011 · 5 comments

As I mentioned last week, (I think) we have a new house under contract — The Drought House…

The reason I say “I think” is that we already had the HUD contract returned once because we didn’t “dot all our i’s and cross all our t’s”. If we didn’t get it right the second time, they’ll likely kick our contract out. At least that’s what they tell us.

Here are some current pictures of the property:


Here are some more details about this property:

  • The purchase price for this one is $56,500. It was listed at $60,000 originally, we offered at $55,000 and ultimately HUD countered and then accepted our $56,500 bid.
  • This will be a full cosmetic rehab, but the goal is to keep the budget as small as possible. We have some left-over materials for previous rehabs that weren’t used, and we have a credits with a couple suppliers that we’ll likely call in, so our goal is to keep the rehab to under $20,000.
  • While I have a feeling we’ll probably be able to get this property under contract for between $105-110K, my guess is that it won’t appraise for more than about $97K. So, when it comes time to list the property, we’ll have to figure out a pricing strategy that will net us the most profit on the sale. For example, keeping closing costs for our buyer to a minimum, not providing extra concessions, etc.

In an upcoming post, I’ll detail our proposed rehab budget for this project…

5 responses to “House #25: More Details”

  1. george says:

    are you getting these HUD homes after they hit the “extended” status?

    i can never get my hands on these type of homes since homeowners take them before i have a chance to bid on them. they ALL get scooped up before the “investment period” opens up.

    do you see that problem in your area?

  2. steve says:

    Out here in California the HUD process is a joke. All the deals I have bought from HUD (3 of them) have taken 3 months from acceptance to closing. They have lost our paperwork, couldn’t figure out the house was in a home owners association, screwed up the purchase price and overall been very difficult to deal with.

    Not to be a downer… but it is a pleasure to see our government at work. Think about the DMV of real estate.

  3. Christina Johnson says:

    Hi there,

    I have a quick question about your site. Would you mind emailing me back when you have a minute @

    Thank you,

  4. Glenn says:

    I am just amazed at the price/size ratio of houses out there in Georgia. Also, is it just me or are those wall colors horrendous! Can’t wait to see your touch on this one J Scott.


  5. J Scott says:

    Glenn –

    Coming from California, I was dumbfounded when we first moved here. A $100K house here would go for $1-2M in parts of CA where I lived…just crazy…

    As for the colors, that’s pretty standard in the REOs we buy…take a look at some BEFORE pics from other houses we’ve done!

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