There is a home going up for auction tomorrow that I am considering purchasing.
Currently assessed at $105k and in a trendy/popular location. Listed on real estate websites as a 1 bedroom/1 bath built in 1910 and 1100 sq feet and a detached 2 car garage. My assumption is that this is listed as a 1 bedroom incorrectly and is or could be a 2 bedroom home. I did a drive by and it does show signs of neglect(older AC, needs new windows, addition on rear has roll roofing in bad shape). Vinyl siding needs to be cleaned but is in decent shape.
It is being foreclosed against an estate, and the amount to be raised/remaining on the mortgage is $30k. It appears to have been last purchased in 1974, so I'm expecting to do full updates inside. It isn't guaranteed that I could get it for this price, but I feel like I have enough room to do significant repairs, and will expect to rent it for $1000 / mo.
Terms of sale - $2000 deposit, 25% of bid due in 30 days and full balance due within 6 months with unpaid balance at 12% APR. Sheriff appraised the house at $110k, and if it sells for less than 2/3rds of appraised the owner has 6 months to buy it back for purchase price +10% APR and any reasonable costs incurred for maintenance and repair. Another assumption is that if the estate/daughter wanted to property she would have acted already.
Estate sale in need of repairs(1400 sq ft) a few doors down went for $42k in 2013. Renovated home a few doors the other way went for $170k, across the street(unsure on renovations) recently sold for $133k.
Thoughts? Being Naive on renovation costs? If another bidder besides the bank is involved, how would you calculate a ceiling?
