REO--First Deal, Future Rental...
Hey Guys, Some input please...
OK, I found an REO in Utah I am interested in buying and renting out. Listed w/ a realtor right now 34,900.00 2/1 on 1/2 acre house is 1 story 1020 square feet. It needs some work, (grass, fencing,) not sure what else, realtor is checking on that for me.
Rents around there go from 450/month -- 500/month, oh and the house overlooks the park...My question is, what to offer, I am having a hard time figuring that out. The figure that is sticking in my head is 20K to 25K not sure if that's too low.
Realtor told me that if I were to resell it in top condition, I could probably get 44K max. Also, she says I need to be a cash buyer-- I thought that if I was pre-approved for a loan that made me a cash buyer. Any help on this is much appreciated!
Thanks--Breanna
Your assessment appears sound...visit with a friendly banker (short-term) or get pre-approved with Countrywide or Wells Fargo (long term)...depending upon your goals...just the type of deal I like to purchase, personally. Good luck.
Thanks Ram,
I think I am going to check into an interest only loan. Do you think it's acceptable to make an offer now that is contingent on me finding proper financing? Or should I just wait until I'm pre-approved (that does make me a cash buyer right?) Still not sure on that.
Thanks,
Breanna
Breanna,
No, that doesn't make you a cash buyer. When you stated you need to be a cash buyer, The first thing that came to mind is that the house won't pass an inspection. Which would cause the bank to require a 442 form done sshowing repairs were made or they would turn down your loan because of unaceptable property. So be careful.
You may be able to get a rehab loan that goes up to 90% of ARV.
Lori
[addsig]
Your numbers look decent. If you really like it and it's been listed awhile, once you're approved you might consider tossing them a teaser 'as is' (be careful of hidden flaws though) cash offer of, say, $20k just to test the seller, and put up a nice chunk of your offer as earnest money, that commands respect. The easier it is for the seller, the more likely they'll take a lowball offer. Don't rely on the Realtor's advice about what they'll take unless you really trust her; her goal is to make the sale, the higher the better.
can move/approve faster the behemouths like Wells Fargo and aren't so picky about details. They sell/place your loan later but that doesn't matter to you now. They can pull your credit on the spot and offer you options. I discovered yesterday I have smokin' FICO scores--which surprised me--so my options have just multiplied (hell, I'm 'no doc' now!), exciting. Good luck!
First you need the approval. If you have good FICO scores, independent local mortgage bankers (Yellow pp, "Mortgages and Contracts"
Thanks everyone for the input!!
I'm looking into a loan as we speak and I will let you all know how it goes. BTW my FICO is 701 and I'm only 21 yippeeee!!!
Congradulations on starting young in your rei career. Offer $15,000.00 this house may be in worse shape than you are being told by the re agent. You can always raise your bid,but you can't go down. My suggestion is to keep resubmitting the same bid until they sell you or someone else the house. How far is the house from where you live?
Hey MichaelChandler,
Thank You! The house I would say is about a 10 hour drive from me--but I'm not sure. You see, I am a private pilot so I fly to most places (it makes the world a lot smaller) So in flight time, about 2 1/2 hours. The thing is--my boyfriend is a pilot for the BLM and USFS and he lives in Utah (this town I'm looking to buy in) from June until September so if I got this house He would live in it for the summer (fix it up a bit since he is also a contractor) and I'd be collecting rent from the government .
And regarding the shape of the house--I will be going to see it but since it was a forclosure with a traditional loan--it had to meet certain standards/criteria for the previous owners to finance it. I'm guessing FHA those guys are so strict! So unless they dumped cement down the toilet or bashed in the walls out of anger--It shouldn't be too bad.
And even if this one doesn't end up being my first deal, I'm still going to get pre-approved and keep on looking...
Happy Investing,
Breanna