My first Deal

Wow. What a difference a day makes. For so long now, I have kept myself on the sidelines hoping for that first deal to fall in my lap. Finally, I decided to be a little proactive, and it paid off. Unfortunately, my first deal resulted in nothing gained but valuable experience. Here is what happened ...

Friday morning, I got online and did a search on Realtor.com for homes in my area for sale for less than $100,000. The very first home I found was a 3/2 located about 4 miles from me, which had a listing price of $61,000. I sent the realtor an email asking them:

Why was the owner selling?
Were there any problems with the property?
Were there any liens/encumbrances on the property?
Would the owner consider carrying-back financing?

Within a few minutes, I got a response email from the broker. She forwarded my email to one of her agents to handle. I went to work, and checked my email at lunch time. The agent responded that it was a FHA foreclosure, and that he would like me to call him with more information. My work prohibits me from making personal calls, but I emailed him that I was still interested in it.

In the meantime, I did some online research. I talked with an investor on a message board about FHA foreclosures, and he directed me to the HUD listing site. He said the process is strictly abided by, and HUD homes are hard to get in a lot of cases. I then went to the web site and searched for the property. I didn't see it listed in the list of active properties, so I tried the closed auctions. Sure enough, it was already bid on. The winning bidder - a local RE office - won the bid on TUESDAY for $76,000. I ran comps on the property, and found that $75,000 is normal for that area.

I immediately emailed the agent, telling him what I had found and if he knew of any properties in the future that are distressed and/or in preforeclosure to let me know. One investor later told me the agent surely knew all along about the state of the property, and just wanted to get me in his door to sell me something else. Sure enough, I haven't heard back from him after sending him my last email detailing my research on the property.

All-in-all, though, it was a great learning experience. It wasn't a deal in the traditional sense, I know, but to me it was.