When it rains it pours, right?  I went from finishing up two rehabs, and thinking my family would have a quiet summer’s end -  to starting this rehab and helping my student Joann with her rehab (see this link for Joann’s story)

For those of you new to this story, we picked this property up off the MLS  (see this link for my 1st installment).  Let this be your guide - you can find great deals on the MLS right now.  This property sat for 588 days as a bank owned REO.  The bank originally listed the house at $299,000.  Then, like Ron Popiel selling a Veg-O-Matic, the bank reduced the price from $299,000, to $279,000, to $249,000, to $229,000.

TIP: When making offers on bank owned properties, wait for the bank to reduce the house in price (assuming that the original price is far more than the property’s worth).  When the bank reduces, make your offer.  It doesn’t matter if your offer is ridiculously low.  It should be!  Let me give you an example - the bank lists the property for $299,000.  You wait and notice on day 31 of the listing, the price drops to $249,000.  MAKE YOUR OFFER - and wait for a counter from the bank.  Let’s assume your offer is $179,000. We’re finding most times, banks will counter with something ludicrous like, $245,000.  At this point most investors would just give up - but not you, because you’re reading this killer tip.  The bank is testing you.  They want to see if you are serious.  So don’t give up.  Counter back.  I would come back at $184,000 - and tell them that’s your best and final.  You’ll see.  I guarantee most banks will come back and say, “OK, take it at $184,000.”  And when they do - you owe me lunch!

What would you pay for this house?  But wait - there’s more!”

(said in my Rod Roddy voice) How about some mold?

Ooooo…..banks hate mold.  No kidding, the remarks in the MLS listing actually said, “MOLD.  DO NOT ENTER THIS HOUSE WITHOUT A FACE MASK!”  How great is that?

Well, that was all I needed to see.  The house is less than 10 minutes from where I live, so I rode over to take a look.  Upon opening the door, I could tell this house would make a great humidor.  It was more humid inside the house, then out.  You know I’m liking it already.  Before crossing the threshold I was greeted with a pretty unfriendly stench of mold.  Some also call that the, “smell of money.”

I could see that a major portion of the ceiling was missing in the living room, and I could see the mold. Over the past five years, I’ve been in the ugliest of ugly houses.  I’ve even seen mushrooms growing out of carpet (still wishing I would have snapped a few pictures of that).  Maybe it was the scary listing remarks, maybe it was the humidity rushing from the house, but I high tailed it out of there before even putting a half of my size 12 shoe in the door.

It took me only a matter of minutes to put the offer together.

THE DEAL.  Tell Us The Deal!

Are you ready?  Are ya sure?  How does $189-grand grab ya?  It must have grabbed the bank pretty good, because they accepted the offer without a counter.  So, I am the proud new co-owner of this lovely house.

Here’s the details:
Purchase Price:  $189,900
Rehab Costs:     $  48,000
Description:      Old-school Columbia, MD.  James Rouse must have loved this house in its day.  There’s just no other architecture like this anywhere in Maryland.  Quirky exterior, weird roof lines, a funky carport.  Its just hideous.  The house sits on a crawl space, and its only floor contains 3 beds, 2 baths, a living room with fireplace, dining room, kitchen, and a huge family room that could also double as a bedroom.

Lemme’ just say this.  If you are looking for a great rehab story, you’ve found it.  We’ll spend close to $50,000 making this place better than new, and its really just a heavy cosmetic rehab.  So, there will be some serious eye-candy for you all to look at - and I can’t wait to show you.

click on the picture for tons more pics!

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