OfflineA REO just listed came across my email today, I jumped on the opportunity to see it, I think I was the first one. It is a 5bdrm/2ba split level 5blocks from my house. FMV is around 170,000 the bank is asking 99,900 for it. It needs work. new kitchen w/ applcs, 2 new bathrooms, new windows and sliding door, some intrerior doors replaced and paint and carpet. My problem is I only have 85,000 to use for the whole deal. my brother in law thought he might want to get into REI with me but is on vacation and I don't know if he is in or out, and won't be able to find out I fear until it's too late. REO's are going for around asking. My father in law uses CD's to earn interest on his savings, but my husband told me under no circumstances am I to ask him. I was thinking to offer him 4% on his money cuz hes only making 3.something right now on a 90 day short term loan. I'm open to some creative ideas here. Thanks
Cathy B
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if you can get an estimate on repairs you could figure out how much you can offer for the house. then just offer what you can with the factored repairs. in the mean time while the bank is mulling over your offer you can try to find some way to get the rest of the money if your offer is countered or denied.
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When a person has money to work with, leverage it within its means. If you could find a partner with $50k you just increased your leverage to split the cost of repairs. Dont believe that $100k home means you have to have $100k to buy it. If that is how you think you should look only at $85k homes, thats what it costs, thats what you got.
It appears you have received some good advice already, a partner would be a good option for this REO. You may even want to offer low say around $75k and see what happens. A bank's motivation can change on a daily basis. Also, keep looking for other potential deals, you may find another deal that has better numbers.
Eventually, over time, people may come to you once you complete a few deals, so let everyone know you are an investor. This may be a good way to get additional deals or financing in the future. Good luck with this REO. Believe and Achieve!
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Thanks for the sage advice everyone, it is much appreciated.
Cathy B
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I was offering full listing price for more than 15 REOs in Orange County CA for the last 40 days but still haven't got a single one.
Is there anyone having same problem?
Those REOs were sold about 20% higher than the listing.
First of all you would want to get comps supporting the bank's asking price, then get an estimate of repairs from a contractor and use this as a way to counter their offer. And if they still will not back down since you have over
80% percent of the fund, tell them that you would like for them to finance the remaining balance plus cost of repairs. If the bank is motivated to get this nonperforming property off their books they most likely will jump on this offer, because it now becomes a perform asset it less owed and less risk. But if you don't ask you don't get. We have not because we ask not. You may just be surprised and have a jewel and the only partner you need is the bank. Do the repairs and selling it with a large profit and pay the bank off or keep it for accrued appreciation and positive cash flow. But I would not let this option pass without at least giving this a try.