OfflineThis one seemed like a no-brainer. We had a contractor (a close friend) look at the partially built new-construction home. He said it was 30% completed. If completed, the home would FMV for about 100K. He suggested a foreclosure offer of 18K but, to start in the 10-12K range.
Right now, it has 10' weeds growing up in the home, only three exterior walls, and basically from the outside you can see straight thru to the other side because the fourth side is not closed. It is only a shell...nothing inside done at all.
The contractor said we could handle this.....he would do the difficult stuff and we do EVERYTHING we could possibly do ourselves. We even checked into ReStore for recycled cabinets and baths. So....again, we decided to go for it.
Now, this home has been sitting (rotting into the ground) since Feb 2008. This time, it has already been deeded back to the bank/REO. I called them and it is one of our small-local community banks. I spoke to the loss manager and he said it is available for sale and to make him an offer: I offered 12,500 as is.
He chuckled and said they would not consider any offer under 60K. What? It is a small lot with some concerete and wood. The house is 30% finished....it in not liveable. WTH?
He said: He will only take an offer OVER 60K, he has estimates from several contractors for "completion costs" and they are all in the 60K range .... he knows the property will appraise at 120K completed. Therefore, he will not consider anything under 60K and with the 60K completion cost ... the house would be at true value. He also said the bank will have the home completed if necessary and sell it themselves before they accept a lower offer.
This is nuts !!!!!!!!!!!
These foreclosures around here are just priced insane and NO ONE will even consider negotiating with us. We couldn't get a move in ready home and now .... we can't even get an offer accepted on a home with "see thru" walls.
Ugh !!!!!!!!!!!!!!!
~~~~~~ Praying for our dream house ~~~~~~
Yep, that can get really annoying. BUT, over time you will just chuckle right back (in your mind, of course. lol), keep that property "on your radar", like Indiana Joe says (for when REALITY hits the bank!), and go onto the next deal. Keep a BUNCH of them in the works and you are BOUND to get one accepted. Congrats for keepin' on.
Wishing for your MUCH-deserved success
,
Rina
P.S. Don't forget the FSBOs and vacant houses.
"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
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Just keep making offers. And just remember to point out all the negative stuff that are wrong with the proprty when talking to these guys and when making offers
Sorry to hear about the latest rejected offer. The best advice is keep the faith and keep making offers on REOs. A bank's motivation can change on a daily basis. Therefore, you may want to submit an offer every 30 days, even if it is your same offer. The next time you submit an offer, maybe submit photos of the home along with your offer. If there have been any police reports due to neighbors calling about people trespassing on the property include a copy of those too and a brief statement highlighting the potential liability to the bank.
You will find a deal and a bank will accept your price and your terms, you just have to believe. One goal may be to try every local small bank or credit union within 20 miles of where you live. Talk to each REO asset manager and see what is available. Also, have your realtor run all the REOs on the market for longer than 90 days in your local desired area and offer 50% of the asking price. Eventually an offer will hit, sometimes it just takes persistence and not letting the rejections deter you from your dream! Believe and Achieve!
- Joe
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KariNmike,
Great info! Not to say to keep making offers,Still if you like this property if you can not get the discounted sale...Go for the small bank carrying the note and REHAB. I guess that would work better in a Buy&Hold game plan,Only you know the plan.I just like the thought of using other peoples money!
Invest in yourself!
You've already gotten really great advice and tips on this post. Just go with it.
Stay focused and dont let these speed bumps stop you. Just keep it up and stay motivated.
Im rooting for you!!!
***
Tracy Lynn
My daily journal link.
I'd love to hear from you.
http://www.deangraziosi.com/real-estate-forums/investing-journals/29564/...
We are going back to the property this weekend and take pictures. I also spoke to my contractor, and investor friend, and others .... No one can believe the price this guy is asking for a "shell" of a house. Literally this is a shed right now and 60K is absurd. My contractor said that even if the outer walls were complete and it had drywall ... he still would not pay over 30K.
My husband is thinking maybe it is these local "country yahoos" talking with a woman and they think I am a moron that they can steam roll over. We are going to take pics, including pics of the banks other house next door which currently for sale for $130. No one will ever buy that completed house with this overgrown half built eye-sore next to it. HE is going to go to the MAIN BRANCH location where the actual note is held (instead of the small town community branch).
We are going to see what reply HE gets and demand the this main branch loss manager see the pics since HE ultimately makes the decisions. Also, my contractor said this bank is calculating their asking amount on the neighboring COMPLETED house appraised value. The contractor said this is ridiculous because there is no way to determine what the value of THIS one will be because it is just a foundation/shell and depending on how it is finished will determine the actual value.
He said "I could put a concrete slab in my yard and tell the bank ONE DAY this slab will be worth 300K ..... I bet they would not loan me money on that guess" - it is just ubsurd.
Trying to stay positive.
~~~~~~ Praying for our dream house ~~~~~~
I would love to be there when he sees the pictures.
Good luck!
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
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Good luck! I got a good laugh out of the last quote from your contractor! keep working hard!
Success and Nothing Less!