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351 msWoods Distressed Homes for Sale

Looking for a bargain? Include foreclosures, HUD-owned, VA owned and bank-owned properties in your search. But be aware of potential pitfalls when purchasing this any of these types of property.

Here are a few things you’ll need to know before investing in any distressed property.

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Foreclosures

While it is possible to find good foreclosure opportunities, contrary to popular belief, most foreclosure sales begin with a list price that is more than what the property is worth. After all, the bank’s goal is to satisfy all liens against the property, recoup attorney fees and other costs associated with the foreclosure process, and make a profit. So the price is usually anything but a bargain.

Occasionally, there is enough equity left in the home to make purchasing a foreclosure a good investment, assuming everything else goes right.

Advantages
  • Possibility of finding a home with equity (rare)
Considerations & Concerns:
  • When you buy a foreclosure home you are getting the home in as-is condition. This means there could still be someone living there who has yet to move out or be evicted. And a lot can happen to a home in the meantime.
  • In addition to the primary mortgage (first lien), other outstanding liens can exist, from tax liens to second and third liens, mechanic’s liens, homeowner’s association (HOA) dues and more. You are inheriting these obligations.
  • Many banks will provide a pest inspection report if you ask for one. Your offer should be contingent on a home inspection.
  • If you are the winning bidder, then you will be required to pay the full bid by cashier’s check.

Bank-Owned Properties (a.k.a., REO)

When a property fails to sell at the foreclosure auction, it reverts back to the bank and becomes part of its real estate inventory. At this point, the primary mortgage is written-off as a loss, and the bank will negotiate with any remaining lien-holders and pay these off, in addition to any other HOA dues, mechanic’s liens, etc.

The first thing to realize about buying a bank-owned property is that the bank is never in a hurry to sell. Unlike an individual seller, there is no personal financial need to sell the home in a hurry. There is neither frustration nor desperation. Quite the contrary, the bank will act in a calculated fashion to maximize profit.

Advantages
  • Possibility exists to find a home below market value.
Considerations & Concerns:
  • Offers and counter-offers are almost never handled in-person, but instead via FAX, email or some other electronic means.
  • Don’t be surprised if the bank’s counter-offer is not what you hoped. The bank’s counter offer must show to shareholders and auditors that the bank made a good-faith attempt to get the maximum, fair-market price. Only when this is not possible will the bank entertain a lower price.
  • Be prepared to make several counter-offers before an acceptable price can be reached.
  • Ask to see any and all reports, such as homeowner’s inspection reports, pest inspection reports, etc.
  • You will want to have the home inspected and appraised, but this will be come at your own expense.
  • Can ask that the bank make needed repairs, although they generally have no interest in doing so.

HUD-Owned Properties (a.k.a., REO)

The main difference between a HUD-owned property and a bank-owned property is that you are dealing with the federal government and not a private bank. When someone defaults on an FHA-insured mortgage, the lender forecloses on the home and then files a mortgage insurance claim with HUD. HUD then pays the lender what is owed and takes ownership of the property. HUD’s goal is to recover the amount of the mortgage insurance claim, and hopefully get a fair market price for the home.

Advantages
  • Opportunity exists to purchase homes below market value
  • If the home meets FHA guidelines, qualified buyers may be able to purchase the home with an FHA-insured loan. Even if the home doesn’t meet FHA guidelines buyers may be still able to purchase it under FHA’s 203(k) Rehabilitation Loan program, which provides funds for the improvements in a single loan closing. The loan-to-value is based on the estimated future value of the home, with the repairs complete.
Considerations & Concerns:
  • HUD homes are sold as-is, and HUD will not pay to make any needed repairs. As with any home, buyers are strongly encouraged to have the home inspected and appraised.
  • Investors may bid on HUD-owned homes only after a period of time has elapsed, called the Exclusive Sales Period, at which point HUD will accept bids from all buyers, including investors.
  • Bids cannot be submitted directly by buyers. HUD uses private contractors, called “Marketing & Management Contractors” to manage its inventory. These contractors work with HUD-registered real estate brokers, called Local Listing Brokers, to accept bids, which can only be submitted by HUD-approved agents.

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7230 North Thunder Ridge Road, Morgantown, IN 46160 7230 North Thunder Ridge Road, Morgantown, IN 46160 Add to Favorites
Subdivision: NA  
What a beautiful country setting - 3 bedroom/1 bath home with a fishing pond set on 4 acres. Wooded lot with mature trees. Don't miss out on this one. Come and see today.
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10303 State Road 26 E, Lafayette, IN 47905 10303 State Road 26 E, Lafayette, IN 47905 Add to Favorites
Subdivision: NA  
3 Bedroom 1 Bath ranch
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2229 East 74th Street, Indianapolis, IN 46240 2229 East 74th Street, Indianapolis, IN 46240 Add to Favorites
Subdivision: Ralston Heights  
Nice investment opportunity near Broad Ripple, but with a little quieter setting. This 2 bedroom/1 bath features a family room and 1 car garage that was converted into living space. The property also includes a large front yard and a fenced backyard. C...
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Aspire Realty, LLC
13797 East 296th Street, Atlanta, IN 46031 13797 East 296th Street, Atlanta, IN 46031 Add to Favorites
Subdivision: NA  
Large 2 story country home on 1 acre, home in need of some repairs, has 3 bedrooms, 1 bath and 1,872 sq ft
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Star Realty
7 West School Street, Maxwell, IN 46154 7 West School Street, Maxwell, IN 46154 Add to Favorites
Subdivision: Reynolds  
3 Bedroom 1 & 1/2 Bath Brick Home. Wood Floors! Enclosed Porch with private view of yard. Large 1 car Garage with plenty of room for work bench and more! Storage Shed and fenced Yard! Some repairs are needed.
3 Beds, 2 Bath Areas, 1025 SqFt
$40,900 (For Sale)
AL Page Realty
2127 Witt Road, Lebanon, IN 46052 2127 Witt Road, Lebanon, IN 46052 Add to Favorites
Subdivision: Rolling Meadows  
Incredible Value on this ranch home in Lebanon. This 3 bedroom, 2 bath home features a split floor plan, great room w/fireplace and vaulted ceiling, laundry room, mini barn and eat-in kitchen w/door that leads to the back wood deck overlooking the privacy...
3 Beds, 2 Bath Areas, 1200 SqFt
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Keller Williams Indy Metro W
8502 North 1000 W, Commiskey, IN 47227 8502 North 1000 W, Commiskey, IN 47227 Add to Favorites
Subdivision: NA  
Four bedroom and two bath manufactured home is VA owned and sold in AS-Is condition.
3 Beds, 2 Bath Areas, 1782 SqFt
$35,000 (For Sale)
F.C. Tucker Scott Lynch Group
215 North Center Street, Flora, IN 46929 215 North Center Street, Flora, IN 46929 Add to Favorites
Subdivision: NA  
Large home with lots of possibilities. Newer Roof, Windows and Siding. Three bedrooms upstairs with loft and bonus room which could be converted to extra closet space or 2nd bathroom. Home needs some updates. Carpets have been removed.
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$39,900 (For Sale)
Homeland Real Est. Connections
1515 West 8th Street, Muncie, IN 47302 1515 West 8th Street, Muncie, IN 47302 Add to Favorites
Subdivision: NA  
This home has 3 bedrooms and 2 bathrooms with over 1,400 square feet of living space. The home features a detached workshop and over 1/4 acre of land.
3 Beds, 2 Bath Areas, 1422 SqFt
$8,000 (For Sale)
Starr Real Estate, Inc.
1217 Park Drive, Lebanon, IN 46052 1217 Park Drive, Lebanon, IN 46052 Add to Favorites
Subdivision: Parkway  
Adorable 2 bedroom 1.5 bath home on Lebanon's east side. This home has been well maintained for and just needs some updates/tlc to bring it back to its original glory. The home has a breezeway to the 2 car detached garage with a workshop area. This home w...
2 Beds, 2 Bath Areas, 1225 SqFt
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Elite Indy Realty Group
30 North Drexel Avenue, Indianapolis, IN 46201 30 North Drexel Avenue, Indianapolis, IN 46201 Add to Favorites
Subdivision: Eastern Heights  
3 bed, 2 bath home in Indianapolis, IN. This home offers hardwood flooring, nice sized bedrooms, and large detached garage. In need of updates and repairs before move in ready. This would make a great purchase for an investor or a handyman. Great potenti...
3 Beds, 2 Bath Areas, 2704 SqFt
$24,900 (For Sale)
US Realty
5501 Breaburn Road, Bargersville, IN 46106
Open House
5501 Breaburn Road, Bargersville, IN 46106 Add to Favorites
Subdivision: Harvest Glen  
WOW! If you are looking for a home with lots of space and in a great location - this is the one for you! Amazing, move-in ready 4 bedroom 2.5 bath home available now in Center Grove. Located in popular Harvest Grove, home features a formal living room,...
4 Beds, 3 Bath Areas, 3267 SqFt
$219,900 (For Sale)
Keller Williams Indy Metro S
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