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REO Purchase- Uninhabitable?

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Nutmeg78

Freshman Member
Joined
Sep 22, 2017
Professional Status
General Public
State
Nevada
Hi All,

I am looking for some info and hoping one of you might have answers.

We are moving out of state to a very crazy home market. We found an REO that we like, could make beautiful and also get a ton of instant equity.

The problem is that is has been vacant so there is no power or water. There are also boarded up windows and the water heater is missing. There was also a car fire in the garage but all the rewiring etc has been completed except for the drywall.

The rest of the house has great plumbing, etc and still has double ovens, stove and sink.

I want to avoid doing a 203k loan for various reasons so hoping this house could be considered habital so we can get a standard loan and then fix it up with the proceeds of our current home.

Is there info somewhere that will guide me through what is considered liveable?

Thanks so much!
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Pay cash. Otherwise its 203k or similar or it ain't going to happen.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
You may be able to get a hard money loan; obviously, the interest rate will be relatively high and you will be required to come in with a larger down payment than if the house was suitable for traditional financing.

From this description:
The problem is that is has been vacant so there is no power or water. There are also boarded up windows and the water heater is missing. There was also a car fire in the garage but all the rewiring etc has been completed except for the drywall.
I cannot see how the property will meet the minimum property standards, as-is, for a traditional loan.

Good luck!
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
It needs windows, it needs a water heater, it need utilities, then you can look for other surprises.
Drywall in garage not usually needed, except for common wall with house, for fire codes.
Sounds like at least a few days work and piles of cash to make it habitable.
If it's in a crazy market, maybe you would be better off renting, at least at first?
Give yourself time to get familiar, instead of jumping into the deep end straight away.
Be careful, you could get burned. :shrug:
 

Tom4value

Senior Member
Joined
Dec 4, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
Yup, that's the problem with a conventional loan on a REO. There has to be no functional issues at closing and the bank will not let you or anyone else do repairs before closing. Cash only or 203 k.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Actually,

Other than cash, 203k and hard money,

There is the option to roll out your 401k as a loan to yourself, or roll your IRA.

Here is a short article about it. But you really want to have your accountant go over it with you, and AND, AND

you want to hire your own local appraiser for as is and as repaired market value appraisals. Do NOT wait on a lender's appraiser if you are considering rolling out your retirement for a housing investment.

https://www.moneycrashers.com/401k-ira-withdrawal-down-payment-house/
.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
You might be better off in Vegas, Baby! :ROFLMAO:

Depends on the market they are moving in to.

How has your 401k or IRA faired against the real estate market in your area in the last ten years?

:ROFLMAO:

Losing money are you?

.
 
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