What To Look For In REOs?
I want to make an offer on an REO that a bank has. The unpaid mortgage on it is $180,000, I was going to offer them $300,000. How could they loose. Am i missing something? I know need to do a title search on it first and see if there are any leins or taxes on it, but since the market value on it is $500,000, am I making a mistake of what?
I have not made a firm offer yet, so your input would be greatly appreciated.
THANK YOU!
Paez,
On the surface that looks like a good dea but let me ask a few questions that may help you get a better answer.
1. Financing - What is your plan and what are the terms of your loan package?
2. Renovations - How much work will it take the bring the house up to market standards.
3. Exit - FSBO, Realtor, of other. How do you plan on getting rid of the property.
There are other questions but this is enough to get a better idea of the deals profitability.
"The unpaid mortgage on it is $180,000"
by definition an REO has no debt. Is this really REO?
I recently found an REO that looked too good to be true. All my due diligence said this could be a good one. So, I had a professional inspection done. The inspector found a serious (undetectable) problem with the slab that would have been close to $50K to correct. I walked away from that one.
So, another question I ask myself is… If it’s such a good find, why didn’t it sell at auction? What am I missing?
If you are doing REO investing, then you are probably best off just using a realtor that looks for "bank owned" "handyman" "as-is" "estate", etc to find you properties. Most REOs are listed on the MLS.
Brenda
I use Property Lead Generator. You can import your data and set up mailing. Just click the mail job and it prints for everyone. Show you the mailing per week and month.
You can also keep track of lenders short sale requirements.
You can get a free version here.
http://PropertyLead.Mihousebuyers.com"
It is now available in the TCI Store.
[ Edited by tbelknap on Date 10/18/2005 ]
[ Edited by tbelknap on Date 10/18/2005 ][ Edited by tbelknap on Date 10/18/2005 ]
ptoyn,
Have you had any success buying an REO directly from a bank? I am going to guess that the answer is no. Large banks will not talk to you. Banks have a step by step process and nobody that you will speak to has the authority to deviate from that process. You might have success with smaller banks. But it will be on a bank by bank basis.
Brenda
Well I would be glad to to talk with you about that. I might know you. My name is Andy Morris. Former member of NCREIA and current member of REIANO. Give me a call at two one six three two four six six three seven. that is my cell phone.
Andy