Would you buy it? Practice drills

Simulations with fictional properties. Each one ends with buy, investigate or pass.

• A $265,000 rental house: would you buy it?: A dated 3-bedroom listed for $265,000. The seller says it rents for $2,300. Value it, price the repairs, run the numbers.
• A Nevada foreclosure auction: what would you really owe?: A trustee’s sale with a $180,000 opening bid. Read the title report, find what survives the sale, and decide.
• A Nevada county tax sale: is a $14,000 house a bargain?: A Clark County tax sale lists a small house with a $14,000 minimum bid. Find out what a tax deed really gives you.
• A Nevada HOA foreclosure: does the mortgage survive?: An HOA forecloses on a condo for unpaid dues. The opening bid is $9,000. Check what stays with the property.
• A Nevada HOA sale where Fannie Mae owns the loan: A townhouse goes to an HOA sale with a $12,000 opening bid. The lender didn’t pay the HOA. Is the mortgage gone?
• A California HOA foreclosure: the 90-day wait: A condo goes to a trustee’s sale for $8,400 of unpaid HOA dues. What comes with it, and when is it yours?
• An Arizona HOA foreclosure: a court case, then a sheriff’s sale: An Arizona HOA won a judgment for $14,000 of dues. The home sells at a sheriff’s sale. What do you actually get?
• A Utah HOA trustee sale: is the sale even valid?: A Utah HOA is selling a townhome by trustee’s sale for $6,500 of unpaid assessments. Check the sale before you check the price.
• A Nevada sheriff’s sale: should you renovate right away?: You can win a house at a sheriff’s sale for $150,000. Then there’s a one-year redemption period.
• An IRS auction: what does the 180-day wait cost?: The IRS is selling a house seized for unpaid federal taxes. Work out what you own, and when.
• An IRS sale with a deposit now and the rest later: The notice lets you pay 20% at the sale and the rest within 30 days. Your loan isn’t approved yet. What could go wrong?
• An IRS sale: which liens does the deed clear?: A rental duplex at an IRS sale has a bank mortgage recorded years before the IRS’s tax lien, and a contractor’s lien recorded after it.
• The owner redeems on day 150: what do you get back?: You bought at an IRS sale for $100,000 and started repairs. On day 150 the owner redeems. Did you make or lose money?
• A bank-owned house: what does the inspection change?: A Fannie Mae-owned house is listed at $310,000. You’re an investor, and the inspection finds a problem.
• A short sale: can you close in 60 days?: A homeowner owes more than the house is worth, and the lender must approve any sale. Your hard-money loan expires in 60 days.
• An Arizona tax lien: what will you really earn?: You can bid on a $2,400 tax lien. The rate starts at 16%, and bidders bid it down.
• A California trustee’s sale: is your winning bid final?: You win a duplex at a California foreclosure auction for $450,000. Then the clock starts.
• A California tax sale: is the $9,000 lot a bargain?: A county tax collector lists a vacant lot with a $9,000 minimum bid. Check what the tax deed wipes out, and what it doesn’t.
• A California sheriff’s sale: what does the notice tell you?: A court ordered a house sold in a judicial foreclosure. The notice says it’s sold subject to a right of redemption.
• A Utah county tax sale: can you back out?: A Utah county auditor’s May tax sale lists a cabin lot. The minimum bid is what’s owed. Learn what the tax deed gives you.
• A Utah trustee’s sale: which loan is foreclosing?: A Utah trustee is auctioning a house at the courthouse. The opening bid looks low. Read the notice before you bid.
• A Utah sheriff’s sale: the 180 days: A Utah sheriff sells a house to pay a court judgment. Then the owner has 180 days to redeem.
• An Arizona trustee’s sale: are you ready by 5 p.m. tomorrow?: An Arizona trustee is auctioning a house. You need $10,000 to bid and the rest by the next business day.
• An Arizona sheriff’s sale: 30 days or 6 months?: An Arizona sheriff sells a house after a court foreclosure. How long you wait depends on what the court found.
• A $1.8 million retail strip: whose income do you trust?: A six-unit retail strip is priced at a 7.5% cap rate on the seller’s pro forma. Check the real income before you value it.
• A 12-unit apartment building: will the lender agree?: Twelve units at $1,500,000. The seller’s expenses look low. Rebuild the numbers and see what a lender will lend.
• A half-empty office building: what does it cost to fill?: A 10,000 sq ft office building is half leased. The price assumes it’s full. Count the cost of getting there.
• A small warehouse that used to be a repair shop: A well-priced warehouse once housed an auto repair business. Before you buy, find out what’s in the ground.
• A vacant restaurant building at a county tax sale: The opening bid is $38,000 for a 6,000 sq ft building. You can only see it from the street. What is it really worth to you?
• A small strip center at a trustee’s sale, with tenants: Four shops, three with tenants. The lender’s opening bid is $1.4 million. Do the leases come with it?
• An office building sold by a court-appointed receiver: A receiver is selling a 30,000 sq ft office building for $2.1 million. The court has to approve the sale. Can someone else outbid you?
• A bank-owned building at auction, with a buyer’s premium: Starting bid $500,000, plus a 5% buyer’s premium, a non-refundable deposit and 30 days to close. What is your real last bid?
• A fix-and-flip at $210,000: is there really a profit?: A dated house is listed at $210,000. Remodeled homes nearby sell for about $340,000. Count every cost before you call it a deal.
• The same flip, but nothing goes to plan: Permits take longer, the repair bill grows 15% and prices dip 5%. See what happens to the same $210,000 flip.
• A BRRRR where the appraisal comes in low: Buy with cash, renovate, rent it, then refinance to get your money back. Then the appraiser says $270,000, not $300,000.
• A BRRRR when rates rise before you refinance: Your plan assumed a 7% refinance. Six months later the best rate is 8%. Does the rental still work?
• A bank-owned manufactured home on its own acre: A 2005 double-wide on one acre is listed by the bank for $165,000. Is it a house to a lender, and is the price right?
• A home in a Nevada park, on a rented lot: A 2010 single-wide in a park is for sale for $60,000. You’d rent it out for $1,500. The lot rent is $900 a month.
• A 1974 mobile home on its own lot, for $55,000: It’s cheap, it’s on its own lot, and it was built two years before the HUD Code. What are you really buying?
• 10 acres for $40,000, with no road frontage: Rural land at $4,000 an acre looks cheap. The listing says “access via dirt road.” Can you get there, and what will it cost to build?
• 4 acres outside town in Arizona, for $28,000: Arizona requires the seller of unsubdivided land outside cities to give you an affidavit of disclosure. What do you look for in it?
• A $90,000 lot to build and sell a new house: New 2,000 sq ft homes nearby sell for about $520,000. Is there room for profit after building costs?
• A Texas trustee’s sale: are the first 15 days safe?: You win a house at a first-Tuesday courthouse auction in Texas for $210,000. Know when to pay, and why to wait before you spend.
• A Texas tax sale: the house you might have to give back: A constable is selling a house for unpaid taxes after a court judgment. The minimum bid is low. The owner’s buy-back right is long.
• A Texas HOA sale: the mortgage and the 180 days: A Texas HOA is selling a house for $5,800 of unpaid dues. Check the court order, the mortgage and the buy-back period before the price.
• A Texas sheriff’s sale: what did the debtor own?: A Texas sheriff is selling a rental house to pay a court judgment. The opening bid is low. Find out what the sale actually passes.