[quote=spdrun](1) Yep, NJ is judicial. Process takes 3-4 years on average vs 1-2 years in CA, which why it’s where CA was two years ago.
(2) Some of the houses/condos are in decent school districts, others are not. Upset (aka reserve) prices run the gamut from decent to crappy. 90% of the stuff went back to the bank to become REOs.
(3) Older isn’t necessarily considered bad on this coast.
(4) The irony of the thing is that I’m actually seeing BETTER deals on rental property in the “good” towns in NJ. Yeah, you’ll pay at least $300k for a duplex, but you can rent it at 8% cap to decent tenants, and no rent control in the wealthier towns either. I’m not even talking about foreclosures, just people who buy and sell organically at what they consider to be a fair price.[/quote]
For an investor, it sounds like you have a better market to shop in on the east coast than we do out west, spdrun. Of course, that is assuming that there is a bottomless pit of potential tenants in NJ/NY who are both qualified to rent and have the desire to rent. In some areas of SD County, a LL or PM Co no doubt gets up to a dozen applications to choose from for ONE rental listing. In other areas of the county, it takes much longer to find a qualified tenant.
If the opening bid at auction is too high and the defaulted property reverts to the lender, it is actually better for a buyer looking for a principal residence (in most cases) to buy an REO, IMO. This is because Frannie lenders have been spending several thousands (in [indirect] taxpayer funds?) to ready a property for sale (which a buyer of a principal residence usually doesn’t have $$ set aside for after closing). After receiving their trustees deed, the REO lenders are then in a position to write off the delinquent excess (over market-value) which was present at the time of auction and then list the property in the range of what it would actually sell for on the open market.
For the buy-to-let investor, it is actually better to buy at the foreclosure auction, unless the opening bid is too high. But, if there is even 20% equity built in and the property is only a cosmetic fixer but otherwise in a solid rental area, it is probably worth it to bid it up to 80% of market value at auction, and, if the successful bidder, either execute a new rental agreement with the current occupants or serve them a 30-day notice to pay or quit after receiving their trustees deed, IMO.
