OfflineI have a great house...I don't want to miss it. I know it will be gone but need advice (Rina, Anita, WMark1963, cbrpower...somebody)
The owner listed on craigslist for $155,900. He lost the house I called him and tried to buy yesterday he said it just went on the market today talk to his realtor. It is being sold as a short sale. (He now lives out of state).
The realtor is accepting offers for the bank. Says bank WON'T pay closing costs (I'll still ask 
) She has it listed at $169,000; bank is running it's own appraisal and won't have it ready for 10 days according to realtor; however, the bank is still accepting offers right now. Needs minor (maybe $500 work) all new appliances and is in mint condition, I want it for rental because I'm not sure I could flip it right away but have a few concerns.
Assuming an acceptance offer of $160,000 + closing costs of $8500 which I believe is the highest I should go considering it's current price tag and to make it an affordable rental. But here's where I'm stuck and facing that "fear" dilemna (BUT I WANT OUT OF THAT BOAT that's why I'm here!!) Monthly rent would be $1225 which includes tax and insurance but doesn't leave room for maintenance, etc. Average homes for rent in our area go for $1100-$1300 max for 2 bedroom (our avg median sale price in this city for 2 bedroom is 170K).
Are there other terms or requests I could put in my offer to the bank to make it more attractive to get the price lowered. There are no bad points like Dean lists in the book to use as leverage. The house is great, appliances, structure, yard size, traffic, location are all excellent and in this particular city rental houses are gone in 1 to 2 weeks of listing but only at that $1200/mo price. Any help is truly appreciated.
HEIDE
TBH... I dont see the deal here. You don't say what the house is really worth ie comparables sales. Is it priced at/near FMV or are you getting a discount?
You are getting barely break even cash flow as you noted so no real deal there.
It's tough to get good deals on "pretty homes" since that is what everyone is looking for.
As for the closing costs... yeah.. Often banks will NOT pay.. nor do repairs. AND they mean it. You are often better off accepting that and lowering the price. When I deal with banks, I ONLY negotiate on price, never on terms.
I see your point. Right now they are still figuring comps to make sure the price they have it listed at is correct. The realtor/broker did her own comps and came up with the $169,000 asking price. The bank may still come back with a higher price. Current Market Value is probably close to $169K but could possibly fetch $174K. Thanks for the help! I certainly don't want to end up flipped on my first deal! I'll try again...
HEIDE
At least your out there taking action, and that's the most important step in making your real estate dream becoming a reality. Once you get your first deal, your prone to do more, and the more you do, the more you learn and the more you learn, the better you become as a real estate investor. Keep looking for better deal and don't you ever give you.
Lloydsap
on keeping a clear perspective on the subject. Even though that wasn't the GREAT deal you were looking for, it sure got your adrenaline going, didn't it? Just think how you'll feel when you find a REALLY great deal! Keep looking. You've got the spirit.
Like lloydsap said, At least your out there taking action, and that's the most important step in making your real estate dream becoming a reality.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
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Heidi,
Be content to have at least got your feet wet, as they say,
even if it falls short of a great deal. A question: (picky me)
how does the rent including taxes and insurance help see the
situation? Or were you comparing what the loan payment would
leave you with for expenses?
As you can tell, a good idea of the value is key to finding a
good deal. By checking out the listings and sales, you'll get a
feel for the values, and when a good one comes along, you'll know.
cactusbob
a deal either. If fmv is 169 then offer like 140. If you got it for 140 then it would cash flow a lillte by renting it at 1225....
Don't Wish the Past, Create the Future! - DH
I appreciate the motivation and you are right Rina. It did get the heart going. Cactusbob - I was trying to compare loan payments to make sure there was enough room for some cashflow. I guess I thought if I bought a great house below FMV I could turn it in 2-3 years because it shows so well. I guess after running all the numbers it just wasn't a big enough profit on either end to call it a good deal. Thanks for all the encouragement.
HEIDE
I'm with wmark, I'm not seeing a great deal. And their are so many great deals out there. It's always a good idea for cosmetic distress, it's really what justifies making a very low offer. But at lease you are out there trying.
Good Luck.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Short sales are best done without a Realtor. The reason is most Realtors do no TRULY understand short sales. If you can get into the pre-foreclosure without the Realtor you would probably be better off. This way you would get the short sale packet, order the BPO, get the repair list, create an offer, negotiate directly with the bank and get an acceptance.
Once you have done all of your own work, it is a great idea to have a Realtor present your final offer to the bank. The reason for this is because banks do not like investors and the Realtor can state I have a client who is offering “X”. This should be the only work that the Realtor should do on the short sale.
Investors that do their own work can close up to 90%. Realtors close in the area less than 30%.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
How do you go about and get the short sale packet and order the BPO? Does you receive the short sale packets directly from the bank of the preforeclosure or do the Realtors have a packet I can use? For the BPO, does this come from the Realtor or is there another way/method to go about this?
Love, Light & Blessings,
Darlene