'normal' amount of risk because they can reject a winning bid on inspection if the properties they bid on are not up to scratch......
A yacht-dealing millionaire ticked off hundreds of Detroit homebuyers when he swept an auction of 650 tax foreclosed properties last week.
Bill McMachen told Fox News 2 this is his first foray into the real estate business. He plunked down $4.8 million for the lot of homes, which averages out to just over $7,000 apiece. As far as his future plans, he says he's shooting to make back $2 million by flipping some homes and donating others to needy families.
Like the some 300 consumers (and other, less well-heeled investors, to be sure) who were elbowed out by McMachen's bid, potential homeowners are quickly finding themselves fighting losing battles against money-slinging investors.
"If we knew it was going to happen like this, we wouldn't even have spent any time," an anonymous investor who was beat out by McMachen's bid told Fox. "They could've made more money, I mean triple the money they made."
"They" is Macomb County, which sold the lot to McMachen for only the price of the taxes that were owed on each property (in some cases as little as $50). As municipal governments struggle to fill their coffers, some have been more eager than ever to sell off tax foreclosed homes––no matter who's buying.
If you're in the market for a new home these days, chances are you'll encounter some stiff competition along the way. Your best line of defense? If you can't beat 'em, join 'em.That means doing every bit as much homework as real estate investors before snatching properties out from under your competitors' feet.
"The savvy investor knows the areas in which he wants to buy, he knows what size and type of properties he’s after, and he knows what he’s willing to spend. So, when he sees a listing that meets his criteria — he’s able to pounce," writes Zillow real estate expert Leonard Baron. "If the offer is accepted, Mr. Early Bird can go see the property; if he doesn’t like it, he can back out of the deal, generally at no cost (be sure to read your contract!)." Here's how Baron suggests making your bid stand out in the crowd of house flippers and Donald Trump wannabes:
- Include a letter that pleads your case.
- If it’s a traditional sale, ask to make your offer in person to the seller.
- Some listings require a lender pre-qualification letter and proof of funds. Whether they’re requested or not, you should always include those with your offer (a pre-approval letter from a lender would be even better).
Bill McMachen Snatches Up 650 Foreclosed Homes For $4.8 Million - Business Insider
Bill McMachen Snatches Up 650 Foreclosed Homes For $4.8 Million - Business Insider
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