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178 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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516 East Iowa Street, Indianapolis, IN 46203 516 East Iowa Street, Indianapolis, IN 46203 Add to Favorites
Subdivision: Beatys  
Investors take look. Close to Bates Hendricks and Fountain Square. This single family home has additional quarters upstairs with separate entry. Could be easily converted to SFR with 3 BR 2 baths and 2 kitchens. Close to downtown and all the popular ameni...
3 Beds, 2 Bath Areas, 2356 SqFt
$99,900 (For Sale)
American Wholesale Properties,
7411 West 1100 S, Westpoint, IN 47992 7411 West 1100 S, Westpoint, IN 47992 Add to Favorites
Subdivision: NA  
Three acre mini farm with several outbuildings. House has hardwood floors throughout. Lots of decorative windows. Large rooms on both levels. Living room and family room on main level. Bonus room on second level could be 4th bedroom. Laundry area just off...
3 Beds, 2 Bath Areas, 3346 SqFt
$80,000 (For Sale)
RE/MAX Real Estate Associates
16 West Main Street, New Palestine, IN 46163 16 West Main Street, New Palestine, IN 46163 Add to Favorites
Subdivision: Waltke  
HUD home selling as-is. See this older home right in the heart of New Pal right on Main St.! This home features 3 bedrooms and 2 full bathrooms and large family room. The front porch wraps back to the back deck and home has good sized garage in back wi...
3 Beds, 2 Bath Areas, 2070 SqFt
$95,000 (For Sale)
Diverse Property Solutions Ind
8174 North 325 W, Fountaintown, IN 46130 8174 North 325 W, Fountaintown, IN 46130 Add to Favorites
Subdivision: NA  
HUD home selling as-is. Rare farm house on 3.5 acres with creek with 2 outbuildings/garage, no close neighbors, master on first floor with access to sunroom, original hardwoods and trim, and much more. This home has so much potential!!
4 Beds, 1 Bath Areas, 2584 SqFt
$150,000 (For Sale)
Diverse Property Solutions Ind
2909 Elva Drive, Kokomo, IN 46902 2909 Elva Drive, Kokomo, IN 46902 Add to Favorites
Subdivision: Orleans Southwest  
3 bedroom 1 bath home in desirable Orleans Southwest neighborhood. Home features a nice fenced in back yard, a 1c-a garage, and partial brick exterior. Don't wait on this one or you will be too late.
3 Beds, 1 Bath Areas, 952 SqFt
$44,900 (For Sale)
Wynkoop Brokerage Firm, LLC
3766 Totem Lane, Indianapolis, IN 46208
Open House
3766 Totem Lane, Indianapolis, IN 46208 Add to Favorites
Subdivision: Parrys Sub  
Absolutely do not make homes like this one anymore. A real brick beauty with slate roof built in 1930 with the family in mind featuring a large open foyer with circular staircase to bedrooms and private rear stairway as well. The master bedroom with sitti...
6 Beds, 6 Bath Areas, 4240 SqFt
$533,900 (For Sale)
American Wholesale Properties,
Address Not Disclosed, Indianapolis, IN 46229 Address Not Disclosed, Indianapolis, IN 46229 Add to Favorites
Subdivision: Irongate  
Large home and plenty of yard space. Property is being sold in AS-IS condition. Seller will not make any repairs. Basement has recently been flooded due to sump pump not working. All buyers and agent must sign a mold disclosure prior to showing. Empl...
4 Beds, 3 Bath Areas, 2324 SqFt
$152,880 (For Sale)
BandWagon Real Estate, LLC
5456 Antoneli Lane, Indianapolis, IN 46237 5456 Antoneli Lane, Indianapolis, IN 46237 Add to Favorites
Subdivision: Arlington Acres  
Amazing opportunity in this 3 bedroom 2 bath home on the Indianapolis SE side. This home has a 1 car attached garage, 2 separate family rooms, and a basement. SEE AGENT REMARKS.
4 Beds, 2 Bath Areas, 2040 SqFt
$87,000 (For Sale)
Berkshire Hathaway Home
1724 North Lafountain Street, Kokomo, IN 46901 1724 North Lafountain Street, Kokomo, IN 46901 Add to Favorites
Subdivision: Park View  
Super clean and ready for the smart investor to add to the portfolio! Main level laundry room and eat-in kitchen! Exterior in good condition and you have plenty of parking rear of home to build a garage! Enjoy the evenings on the covered front porch! Take...
2 Beds, 1 Bath Areas, 768 SqFt
$14,900 (For Sale)
United Real Estate Indpls
7416 King George Drive, Indianapolis, IN 46260 7416 King George Drive, Indianapolis, IN 46260 Add to Favorites
Subdivision: Lions Head  
The best kept secret for gated living. Enjoy the pool and clubhouse and paid heat, water/sewer. Beautiful fireplace in hearth room, generous eat in kitchen PLUS a formal dining room for entertaining. Large living room with built ins and lots of light.
2 Beds, 2 Bath Areas, 1975 SqFt
$120,000 (For Sale)
Ala Carte Realty
1827 North Sharon Avenue, Indianapolis, IN 46222 1827 North Sharon Avenue, Indianapolis, IN 46222 Add to Favorites
Subdivision: West Haven  
This great 3bd 2ba very little work to make it like new again. Built in 2002 makes it one of the newer homes in the neighborhood.
3 Beds, 2 Bath Areas, 1272 SqFt
$49,900 (For Sale)
Highgarden Real Estate
3920 Zeenat Drive, Indianapolis, IN 46254 3920 Zeenat Drive, Indianapolis, IN 46254 Add to Favorites
Subdivision: Guion Pointe  
Here it is. A rare 5 bedroom home with a full basement. Come see this expansive home with a oversized living room and a large kitchen for entertainment. This corner lot home is much larger than it appears. It wont take much to make this one shine again. S...
5 Beds, 3 Bath Areas, 2990 SqFt
$130,000 (For Sale)
Wynkoop Brokerage Firm, LLC
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