Can I Low Ball?
I know that a property listed with a realtor at $55,000 is a forclosure owned by the bank. I also know that the bank estimates the place needs $20,000 worth of repair before it is livable. I am interested in rehabbing it because properties like it are going for $80,000-$90,000 in the area. It is near the golf course and surrounded by $150,000+ properties. Since I know it is a forclosure can I give them a low ball bid and how much do you think I should offer?
It doesn't cost anything to make an offer. Decide the most you can pay for the property, and still make a buck or two, and offer that. Leave PLENTY of room for the rehab portion of it, 'cause it seems there's always a hidden cost, no matter how many inspections or what-not you get. Good luck with whatever you decide.
can my loan cover the cost of the house and the rehab or do I have to get a separate loan on each?
That depends on your lender. In most cases you can get one loan for the whole thing.
In addition, some lenders will require you to treat the loan as a construction draw. You can only receive funding in stages.
Good luck!
Chris
i'm basically not qualified to answer this, BUT since i can't keep my mouth shut i'll feed in. i've never used bank or hard money, so that's why. but i do know that some lenders will supposedly lend based on arv. if this is the case, then you're fine. if they lend on current (condition) fmv, then you have to offer low enough that you can squeeze rehab costs in and still come in under the as is fair market value. ie., if your place is worth 50k now but worth 75k after repairs then bid low enough to allow rehab fees and come in under that 50k - and you should be ok.
again, i don't use either source, i use private money guys and for the proper deal, they can be persuaded to cover all costs (acquisition, rehab, etc...). treat them fair and you have a friend you can count on.
:-D
Just remember that if the realtor is actually doing their job (or what they think there job is) he or she is probably gathering half a dozen other LOW BALL offers besides yours.
Are you sure he or she is going to submit yours???? better check on that or somehow get past the Agent and work with mortgagors
Make your low ball offer and continue to make the same offer every week until the house is sold to you or someone else. I would offer $30,000.00. When banks accept offers on houses they make no sense. The worst thing they can say is no.