Bank foreclosed home, why so cheap?

[Richard H.S. Yun]

Hi, I'm a novice and still in search for my first property purchase.

 

As I went through some sites and I saw that a legit bank was selling out a bank foreclosed home for only few grands. Although the house does look very old and some parts of the interior of the house is damaged.

 

How is it so cheap (or is it not cheap?) ?

How much does it cost to renovate and/or  assign managment for the property when rented to a tenant?

Is there seperate property tax that may be exponentially greater than the actual price?

Could it be that there is debt on the property that I may be liable for if I purchase it?

 

 

I apologize for very basic questions but I would appreciate it if anyone can answer them for me. More detail the more I learn :)

 

Details below:

Bedrooms: 3

Bathrooms: 1.00 Wayne, Michigan Year built: 1934 Land: 70w x 100d Living area; 1080

 

[Richard H.S. Yun]

Hello everyone!

Thanks for the advices, I will continue to research and educate myself throughout to find the best property :)

I may come across another question and I'll ask then.

Thanks,

Richard

[Ankit Duggal]

How is it so cheap (or is it not cheap?) ?-> Richard the cheapness of an asset is a relative measure. As Nick adequately pointed on his post that an asset's nominal dollar price has nothing to do with its relative cheapness. 

How much does it cost to renovate and/or  assign managment for the property when rented to a tenant? Property management typically ranges from 5 to 10% of gross collected rents. In terms of how much it costs to renovate, that really is a function of the condition of the asset and how cheap you are getting to the retail value of the asset. 

Is there seperate property tax that may be exponentially greater than the actual price?-> Not sure what this question is actually trying to ask. 

Could it be that there is debt on the property that I may be liable for if I purchase it?-> Typically a  title search will reveal all the debts on the asset that you need to pay off i.e. mortgage, taxes, water & sewer. The only thing you should watch out for is municipal fines or outstanding permit issues. 

Happy Investing

Ankit 

[Justin Sallusto]

Hi Richard:

I have an investment in Michigan property.

Please email me your phone number at:

[e-mail]

Thanks,

Justin