In December of 2010 I purchased a townhouse at a foreclosure auction.
I wrote an update about the situation here, talking about the overall financial picture. I still don't understand why citibank didn't redeem the property prior to auction, but hey, it worked out for me.
To get the former owners to move out, I offered them $500 and a date, and they agreed, and moved out on schedule.
Painting costs: $400
New dishwasher: $650
Stove repair (projected) $125
Move out inducement: $500
Purchase price: $101,000
Total acquisition price: $102,675
I had to carry it vacant for 15 days while it was painted, but it's occupied now, and that's a short vacancy for rental properties, especially in this sort of market.
As a rental, this 3br 2.5 bath/2000 sq foot will rent for $1100-1200/month. This is down $200 a month from the last few years, and this reflects the overall market.
Basically I'm able to rent it at a rate of 1% of the total purchase price per month, after taxes. This is the lowest cost unit in this development in terms of purchase price, so I'm probably doing ok...but that's not the whole story. After property taxes, and with a set-aside to cover stuff like a management firm to manage the rental, I'd expect an ROI of around 6%.
Prices in this area (north marysville, wa) are still going down. An identical floorplan unit next door was repo'd by a bank, and put on the market. The bank has been cutting the price $5-8k/month for the last year. They initially listed it at 160k, and the last listing that I saw had it listed at 137k. There are people who want to buy it, but these are relatively cheap units, and folks who want to live here typically can't get financed. The traditional buy-and-flip model wouldn't work here as it has in the past. My intention is to keep it as rental property for the foreseeable future.
Summary: Rental property purchased for $50/sq foot, closed on day of auction, no issues removing former owners, property in good shape and occupied.
this is probably the last post I'll make on this property.
2 hours ago