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157 msWoods Distressed Homes for Sale

Looking for a bargain? Include foreclosures, HUD-owned, VA owned and bank-owned properties in your search. But be aware of potential pitfalls when purchasing this any of these types of property.

Here are a few things you’ll need to know before investing in any distressed property.

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Foreclosures

While it is possible to find good foreclosure opportunities, contrary to popular belief, most foreclosure sales begin with a list price that is more than what the property is worth. After all, the bank’s goal is to satisfy all liens against the property, recoup attorney fees and other costs associated with the foreclosure process, and make a profit. So the price is usually anything but a bargain.

Occasionally, there is enough equity left in the home to make purchasing a foreclosure a good investment, assuming everything else goes right.

Advantages
  • Possibility of finding a home with equity (rare)
Considerations & Concerns:
  • When you buy a foreclosure home you are getting the home in as-is condition. This means there could still be someone living there who has yet to move out or be evicted. And a lot can happen to a home in the meantime.
  • In addition to the primary mortgage (first lien), other outstanding liens can exist, from tax liens to second and third liens, mechanic’s liens, homeowner’s association (HOA) dues and more. You are inheriting these obligations.
  • Many banks will provide a pest inspection report if you ask for one. Your offer should be contingent on a home inspection.
  • If you are the winning bidder, then you will be required to pay the full bid by cashier’s check.

Bank-Owned Properties (a.k.a., REO)

When a property fails to sell at the foreclosure auction, it reverts back to the bank and becomes part of its real estate inventory. At this point, the primary mortgage is written-off as a loss, and the bank will negotiate with any remaining lien-holders and pay these off, in addition to any other HOA dues, mechanic’s liens, etc.

The first thing to realize about buying a bank-owned property is that the bank is never in a hurry to sell. Unlike an individual seller, there is no personal financial need to sell the home in a hurry. There is neither frustration nor desperation. Quite the contrary, the bank will act in a calculated fashion to maximize profit.

Advantages
  • Possibility exists to find a home below market value.
Considerations & Concerns:
  • Offers and counter-offers are almost never handled in-person, but instead via FAX, email or some other electronic means.
  • Don’t be surprised if the bank’s counter-offer is not what you hoped. The bank’s counter offer must show to shareholders and auditors that the bank made a good-faith attempt to get the maximum, fair-market price. Only when this is not possible will the bank entertain a lower price.
  • Be prepared to make several counter-offers before an acceptable price can be reached.
  • Ask to see any and all reports, such as homeowner’s inspection reports, pest inspection reports, etc.
  • You will want to have the home inspected and appraised, but this will be come at your own expense.
  • Can ask that the bank make needed repairs, although they generally have no interest in doing so.

HUD-Owned Properties (a.k.a., REO)

The main difference between a HUD-owned property and a bank-owned property is that you are dealing with the federal government and not a private bank. When someone defaults on an FHA-insured mortgage, the lender forecloses on the home and then files a mortgage insurance claim with HUD. HUD then pays the lender what is owed and takes ownership of the property. HUD’s goal is to recover the amount of the mortgage insurance claim, and hopefully get a fair market price for the home.

Advantages
  • Opportunity exists to purchase homes below market value
  • If the home meets FHA guidelines, qualified buyers may be able to purchase the home with an FHA-insured loan. Even if the home doesn’t meet FHA guidelines buyers may be still able to purchase it under FHA’s 203(k) Rehabilitation Loan program, which provides funds for the improvements in a single loan closing. The loan-to-value is based on the estimated future value of the home, with the repairs complete.
Considerations & Concerns:
  • HUD homes are sold as-is, and HUD will not pay to make any needed repairs. As with any home, buyers are strongly encouraged to have the home inspected and appraised.
  • Investors may bid on HUD-owned homes only after a period of time has elapsed, called the Exclusive Sales Period, at which point HUD will accept bids from all buyers, including investors.
  • Bids cannot be submitted directly by buyers. HUD uses private contractors, called “Marketing & Management Contractors” to manage its inventory. These contractors work with HUD-registered real estate brokers, called Local Listing Brokers, to accept bids, which can only be submitted by HUD-approved agents.

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2203 West Cross Street, Anderson, IN 46011 2203 West Cross Street, Anderson, IN 46011 Add to Favorites
Subdivision: NA  
This stone ranch style home features a 2 car attached garage, 2 bedrooms, 1 bathroom, large living room with fireplace and a spacious eat in kitchen. Plenty of parking with the over sized drive way and tons of outdoor space as well.
2 Beds, 1 Bath Areas, 1392 SqFt
$85,000 (For Sale)
Starr Real Estate, Inc.
406 North Main Street, Gaston, IN 47342 406 North Main Street, Gaston, IN 47342 Add to Favorites
Subdivision: B & S  
This home includes 1,960 sq. ft., kitchen, living and family rooms, 3 bedrooms, 2 full baths and laundry. This home is situated on a .14-acre lot, and includes two decks on front and rear of home.
3 Beds, 2 Bath Areas, 1960 SqFt
$59,900 (For Sale)
RE/MAX Performance
2630 South Russell Ridge Road, Rockville, IN 47872 2630 South Russell Ridge Road, Rockville, IN 47872 Add to Favorites
Subdivision: Whalen Acres  
Have you been dreaming of a lake house? This home has tons of potential to become the lake house you have always wanted. Secluded, lakefront property (includes additional lot). This rustic home is tucked away in a quiet cove on beautiful Cecil Harden Lake...
4 Beds, 3 Bath Areas, 2700 SqFt
$245,000 (For Sale)
Keller Williams Indy Metro NE
159 Hadley Street, Mooresville, IN 46158 159 Hadley Street, Mooresville, IN 46158 Add to Favorites
Subdivision: Hadleys  
Large 3 bedroom 1 bath ranch on desirable .21 acre lot in the heart of Mooresville. This home features both a living room and a family room, a stone fireplace, fenced in back yard, and more. This home has tons of potential and is priced right. Hurry be...
3 Beds, 1 Bath Areas, 1380 SqFt
$89,000 (For Sale)
Wynkoop Brokerage Firm, LLC
2843 Hillside Avenue, Indianapolis, IN 46218 2843 Hillside Avenue, Indianapolis, IN 46218 Add to Favorites
Subdivision: Sangster Harrison  
Great opportunity to own this Ranch style 3 Bedroom, 1 Bathroom home with approximately 1260 square feet of living space. Home has enclosed porch, ample kitchen cabinet and counter space and a 1 car attached garage. Would make a great first time home or...
3 Beds, 1 Bath Areas, 1260 SqFt
$25,300 (For Sale)
Owners.com
787 State Rd 234, Cayuga, IN 47928 787 State Rd 234, Cayuga, IN 47928 Add to Favorites
Subdivision: NA  
Vacant lot/ building site.
0 Beds, 0 Bath Areas, 0 SqFt
$125,000 (For Sale)
F.C. Tucker West Central
912 West 300 N, Anderson, IN 46011 912 West 300 N, Anderson, IN 46011 Add to Favorites
Subdivision: Blairs Green Acres  
This home includes 944 sq. ft., 2 bedrooms, 1 bath and one-car attached garage, and is situated on .20-acre lot. To be SOLD AS IS. Info deemed accurate, but not guaranteed.
2 Beds, 1 Bath Areas, 944 SqFt
$39,900 (For Sale)
RE/MAX Performance
1788 East Us Highway 36, Markleville, IN 46056 1788 East Us Highway 36, Markleville, IN 46056 Add to Favorites
Subdivision: NA  
Large single family home located on close to 1/2 acre of land right on SR36 with easy access to Anderson/ Pendleton and I69. The home has 3 bedrooms, 1 full bath, large rooms, formal dining room, living room and a separate family room.
4 Beds, 1 Bath Areas, 2891 SqFt
$37,900 (For Sale)
Starr Real Estate, Inc.
1517 North Ridgeport Lane, Bloomfield, IN 47424 1517 North Ridgeport Lane, Bloomfield, IN 47424 Add to Favorites
Subdivision: NA  
Four bedroom bungalow on .71 acres of beautiful land. Three season sunroom. Cozy living room with great views. Kitchen with loads of cabinet and counter space including breakfast bar. Master bedroom with hardwood flooring and large picture window. Full ba...
4 Beds, 1 Bath Areas, 2700 SqFt
$75,600 (For Sale)
Berkshire Hathaway Home
1514 Alimingo Drive, Indianapolis, IN 46260 1514 Alimingo Drive, Indianapolis, IN 46260 Add to Favorites
Subdivision: Delaware Trails  
This is your HGTV opportunity. A large home in a neighborhood of high effective demand. It needs work!! It in all likelihood, it will not take a mortgage, but the seller does not rule out that possibility and nor will a financing contingency be a defin...
4 Beds, 4 Bath Areas, 2678 SqFt
$124,901 (For Sale)
Moores Realty
2405 Hulman Street, Terre Haute, IN 47803 2405 Hulman Street, Terre Haute, IN 47803 Add to Favorites
Subdivision: NA  
So much charm in this mid-century bungalow. Well maintained high quality vintage features throughout. Original woodwork. Sunny kitchen with lots of windows and a cozy breakfast nook. Updated furnace and water heater. Back yard features covered parking and...
2 Beds, 1 Bath Areas, 2248 SqFt
$18,900 (For Sale)
Berkshire Hathaway Home
2426 Winfield Avenue, Indianapolis, IN 46222 2426 Winfield Avenue, Indianapolis, IN 46222 Add to Favorites
Subdivision: Kessler Court  
Great investment opportunity in Wayne Township. This bi-level home is located on a mature corner lot with storage shed. The home features 4 bedrooms, 2 kitchen areas, a formal living/dining room combo, family room and 2 car attached garage. Agents, note ...
4 Beds, 2 Bath Areas, 2160 SqFt
$47,000 (For Sale)
Keller Williams Indy Metro W
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