Most people have seen HGTV where investors buy distressed properties, spend a lot of money renovating them, sell them quickly, and net a handsome profit. While these HGTV programs are considered reality TV, the market in Onslow County is a little different but people are still making a good profit everyday in real estate.
In Onslow County the market has basically two types of bank owned properties which I refer to as wholesale and retail properties. All bank owned properties are sold “as is”. The wholesale property typically is not eligible for a mortgage due to required repairs in order for a lender to finance the loan. It is great for the cash or hard money investor who has the ability to fund the purchase and repairs in hopes of making a profit. Some people refer to them as a “flipper”.
Many of the bank owned properties in Onslow County are what I consider “retail properties”. These homes usually have no required repairs and are move-in ready. They may require painting, cleaning, or yard work to meet the client’s taste. These are great for people that are renting on a month to month basis, plan on being here 1 to 2 years, want a low mortgage or housing costs, and hope to turn a good profit when they sell.
Between April 2013 and April 2015 buyers utilized the VA home loan to purchase 302 of the retail bank owned properties. The average purchase price of these properties was $130,187 with an average assessed value of $171,233. If the purchaser financed 100% of the loan ($130,187) for 30 years at 3.75%, had property taxes of $1,155 yearly, and home owner insurance of $1000.00 annually, the mortgage payment would be $782.50. This payment is a fraction of the average rental rate.
In the example above, most people are still living in these homes today and are enjoying an extremely low mortgage payment. Of the people that bought during this time frame and have already sold their homes was the average purchase price was $116,413 and the average selling price was $139,288 or a gross profit of $22,875.
Any type of loan can be used to purchase these retail bank owned properties. The examples utilized above were based on VA home loans. The VA Loan program is the most powerful home loan program on the market for many veterans, service members and military families. These flexible, government-backed loans come with significant benefits that open the doors of homeownership to veterans who might otherwise struggle to obtain financing. VA loans require no down payment or private mortgage insurance. They feature competitive rates and terms and allow qualified borrowers to purchase a home with little to no money out of pocket
If you want to learn about how my team can help you purchase a bank owned property, please give us a call at 910-290-6447.