I’ve been casually looking for another rental property next to the one I already own. For a long time, the people in the area have been very proud of their houses, asking nearly 5 times what they’re actually worth. Needless to say, those houses are still on the market, many for as long as 15 months and counting.

But there is one property just a block or two away from my first one that has been on the market for 4 months, and its price has been dropping like a rock. The reason? The bank wants out!

I remember back when this property was on the market the first time around, and was purchased for nearly $100,000 by someone with intentions to rehab it. Evidently, they got half-way through with the job and ran out of money. The foreclosure process began and the bank ended up with their very own, half finished rehab. Just what they wanted, I’m sure!

The initial list price was $89,900 and has come down $10,000 each month for the last three. The current list price is $59,000 but I’m sure the bank would take less if the terms were right.

I’ve got an appointment to take a look in the property on Saturday, but I got bored today and started snooping around outside and looking through the windows.

The stucco exterior is in good shape and has been recently painted. The windows look brand new all the way around, and with the exception of a couple of torn screens, won’t need any work.

The bushes in the landscaping have died off due to neglect, but it wouldn’t take much to spruce things up.

The air conditioner looks fairly new, as the finish on the side of it is still shiny.

The property lacks guttering all the way around, but it wouldn’t take much to fix that. The last guttering job I had done ran me $800, but I wasn’t terribly pleased with the workmanship.

Peaking through the windows, the kitchen has been completely upgraded with new tile and counter tops all the way around. It’s not contractor-grade stuff either, which may explain why they ran out of money during the rehab!

The carpet in the lower level looks like it needs to be replaced or at a very minimum steam cleaned, and there are a few holes in the drywall, which is an easy fix. The original trim is still intact and has been recently painted, but I’m not a big fan of the pinkish color.

Naturally, I wasn’t able to see the bedrooms in the upper level, or the basement.

A few things I’ll be on the lookout for on my visit Saturday:

1. The condition and extent of the electrical wiring.
2. The condition of the plumbing. Anything but newer copper could pose a problem.
3. The condition and structural integrity of the foundation. The stacked-rock foundations in the area are fairly robust, but this is a major area that could bust a deal really quick.
4. Overall integrity of the structure. Drywall I can handle, major structural issues, not so much.

The property is in a better part of the neighborhood than my first rental, but it’s also further away from the local campus.

More to come…

Tags: foreclosure | investment property | Real Estate | rental propert

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