Banks doing rehabs..

Tammy:
I have heard of this. I have a friend who is a contractor and recently, he has been getting alot of work from banks, to come in and fix up the properties that they have taken back and are now in their portfolio.

Now, do not hold me to what I about to say and perhaps I do not understand it thoroughly, but he said to me that the banks want to be able to sell the properties to owner-occupant end buyers. They don't really want to deal with investors, and by fixing up the properties, they can get a price more reflective of market value.

Also, realtors want to deal with better quality properties, especially those that only deal with quality properties.

my aunt in Northern CA said the bank she used to work for was doing this back a few years ago. it was a privately-owned bank and they were actually rehabbing them and renting them out so they could at least have a little money coming in. desperate times call for desperate measures.

Yes; I know Wells Fargo is doing their own rehabs after taking back their properties. As indicated above, they can be tricky to the poor souls trying to get short sales approval. I know a friend of mine had an investor buyer all lined up who had made a reasonable offer for a short sale on her condo. He was in constant contact with WF always trying to ascertain the status of the approval process, as he had done this many times. This took MONTHS.

Comes down to the fact that sneaky WF foreclosed on her condo without even accepting, denying or countering the investor's bonafide offer even though the investor had just called that week, and when my friend and the investor made a fuss to WF, they just shrugged and said it must have been an error. They tried to get WF to set aside the foreclosure, but wouldn't budge.

Next thing I know, after paying her some walk away money (in lieu of eviction), WF sent in a team of contractors to rehab her condo so it could re-sell for top price.

So that's how WF deals with short sales! Just foreclose on them and say "must have been an error". Talk about bad faith.

Did anyone besides me notice that WF was not one of the 3 major banks that halted foreclosures this week due to their errors? Lordy!

Good luck!

I,m a contractor I better go see the repo rep at Wells Fargo.

Some of the banks are doing anything they can just to get some income. But they had rather sell them first if they can. Remember Banks are not in the real estate business.

Randy

I believe some of the banks are attempting to reposition themselves for the possible double dip in real estate. With so much inventory on the market and coming to market in the next year, the banks have realized that they must do something different to protect their capital base. It is an extension of their process that they have used to secure their foreclosed properties. Now instead of just winterizing the home and boarding it up; they are going to start putting lipstick on the pig.

are only rehabbing properties that don't require more than cosmetic work. We're talking 5k - 8k. Properties that require double digit rehab monies are not being rehabbed. They are leaving these severly distressed properties to the buyers, so there are no worries. You still need to be careful because banks are getting rehab estimates and it reflects in their pricing. For example,ARV is 100k, house needs 50k in repairs, house is listed at 50k. It looks like a killer deal, but in reality once you figure in your holding costs, rehab costs, etc. you are really paying 100 to 105% of the potential property value. Of course the longer the house sits the more the bank is willing to negotiate that price. In addition, if you go into the house and you catch something that they didn't you can hit them up for the discount. You can get some good deals if what they missed sounds BIG, but in reality can be fixed for a few thousand like mold or termite damage, etc.

I ran 2 adds in the free paper 2 days ago, one was "rent to own a home" and the other was "we buy houses". I got a call from a guy wanting to know whats it all about? Well I called him back and spoke with his 78 year old mother. She tells me they are both retired and can afford $600.00 TO $700.00 a month payments and are looking for a 2 or 3 bedroom. I have to call her son back in the morning. So I have to find something for them. Any advice?
Also I called a FSBO today and talked to a older gentleman who wants to sell his house and move out of state, I'm going to meet with him Saturday morning. Any advice?

Thanks Dave

Im seeing really clean REO's on the market lately, new paint, new carpet, new kitchen with new landscaping. I wonder if this means they're gonna be turning down lots of short sales on purpose. Kinda sucks when your goal is to buy, fix, and flip.

Yes, banks are doing some of there own work, some major, some minor. The thing is this, there are sooo many banks that don't do this, why bother focusing on the one negative. This one of the many things that should have been learned just by watching Dean's blogs. Letting yourself get caught up in the negative. Find the positive in it. When you find out that it is a Wells Fargo REO or preforeclosure, you won't be wasting tons of your time trying lock something up that is just gonna fall through. Now you can just move on to the next. There are too many properties out there to worry about banks getting into construction and think that this is gonna make things harder. Besides, we get taught to buy it right so you can still sell below FMV. By the time the bank is done dealing with contractors they don't know ( not bashing contractors cuz I'm one myself ) and get nickel and dimed by lawyers and realtors they won't have a choice but to sell at or above FMV, so there the house will sit again. I guess after all the rambling I'm just trying to say stay positive and forget the negative. Watch Dean's blog's from the last two weeks. Good stuff!!