Best Way To Present Offers To Banks (REO's)
There's a large condo that I'll be making a lowball offer on. Here's the rundown:
-Biggest condo in the complex (twice as big as average)
-VERY Strange floorplan (my argument is that it needs to be gutted and turned into 2 condos).
-Double Condo Fee
-Owner is responsible for maintenance of the back yard (only one in the complex like that)
-Bank has owned it for almost 2 years.
-Asking/appraised price $350,000. Most are selling for $180K to 220K.
I would like to do either flip it or hold on to it as a rental and then pull money out with a HELOC to finance other projects. I'll only buy it if I can get an amazing deal on it.
SO......Here's my question. What is the best way to PRESENT this offer to the bank? Do I explain all of the things above to them when I present the offer, or do I wait until they call me back and ask me what I was thinking? Any suggestions? This will be my first time working with a bank. Thanks.
I can't get banks to negotiate much with REO's. They seem pretty stuck on their pricing, unless you can really back up reason why it needs to be discounted. You may , for example, show them that you are going to have to spend $1200/yr for yard maintenance. Try to really point out it's defects and how muchy it will cost to repair(preferably with quote from the most expensive G.C.)
I don't know if I would go into the gutting and making into 2 units. You may want to approach a bit more vaguely , such as the floor plan is functionally obsolete and you will have to spend $40,000 (example) to update this unit to get it comparable to other units in the building.
Are you trying to get the bank that owns the property to give you a mortgage for it?
If not, I don't think they give a hoot about what your plan is, they just want your money. If you can prove you will be able to buy the place from them go ahead and low-ball it. If they have had it on the books for two years, I'm sure they are anxious to get rid of it.
I also understand some banks become more motivated toward the end of the year to get properties off the books. Make your lowball now and if they don't go for it ask again in December.
Ron
Hello, Hibby, I always enjoy reading your posts.
"I would like to do either flip it or hold on to it as a rental and then pull money out with a HELOC to finance other projects. I'll only buy it if I can get an amazing deal on it."
What does HELOC mean?
Thanks,
OTW:-D
Oh, I got the Line Of Credit part...
OTW