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Author Topic: Bank Owned/REO's  (Read 14107 times)

Offline ronnie

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Re:Bank Owned/REO's
« Reply #15 on: October 03, 2006, 11:52:01 pm »
I agree with Gordo.  All REOs are not good deals.  You have to keep seatching till you find one that makes sense.  Dont go by your gut feelings but do the math....if it doesnt make sense, walk away.
Ronnie

Offline bigsticker1

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Re:Bank Owned/REO's
« Reply #16 on: October 04, 2006, 10:16:21 pm »
matt, is there a particular web site that you access that has bank owned properties? does the banks have their own sites?
thanks
Ross

Offline ronnie

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Re:Bank Owned/REO's
« Reply #17 on: October 08, 2006, 11:32:08 pm »
Can you buy REO at 70% of the ARV.  Has anyone done it????

Offline gordo2417

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Re:Bank Owned/REO's
« Reply #18 on: October 08, 2006, 11:51:04 pm »
Sure you can.  You just have to wait them out.  I got an REO accepted this past week and have it sold on a lease/option in as is condition.  Right now its worth 65K and I bought it for 42.5K.  So that's in the 65% range.  I sold it for 62K, 12 month lease, 1K down, and payments of 665.00 per month.  I know alot of people that would have passed on this property and I probably wouldn't blame them.  I use L/O marketing to move my properties a little quicker, get the cash flow, pull out some money, and look for other deals.  This works for me but not for others.  I have to admit this is my first time getting "lukcy" and having a tenant/buyer ready to go before I even close on the home.  

Nate-WI
Nate Andree
NJA Investments LLC
njainvestments.com
920-428-9858
[email protected]

Offline propertymanager

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Re:Bank Owned/REO's
« Reply #19 on: October 09, 2006, 05:49:10 am »
Ronnie,

I have bought a lot of REOs at far below 70%.  As Nate said, persistence is the key.  Banks have their own agendas and often they will hold the properties a LONG time.  As an example, I bought a 4 br, 2ba house for $33K which needed almost no repairs.  It appraised at $72K and is currently rented for $675.  I bought another 2br REO for $19K which also needed very little repair.  It appraised at $52K and is currently rented for $500.  I bought a duplex for $11K that needed $25K in rehab; appraised at $82K, and rents for $900.  All of these (and many more) are well below 70% ARV.    

As with any type of property, only a very small percentage of the houses on the market (including REOs) are a good deal.  This is probably less than 1 percent at any given time.  Just do the work and you too can find some great deals with REOs.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline ronnie

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Re:Bank Owned/REO's
« Reply #20 on: October 09, 2006, 11:28:58 am »
Mike and Nate,
Thanks for replying.
Would you PLEASE elaborate a bit more on L/O.
// Ronnie

Offline gordo2417

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Re:Bank Owned/REO's
« Reply #21 on: October 09, 2006, 12:32:06 pm »
Lease/Options are also known as rent to own.  Basically its taking all the landlording out of the property.  You agree to sell a property for X amount with a non-refundable deposit and agreed monthly payments usually on a 12-24 month lease.  They are responsible for all repairs to the home and carry the responsibilty of being a homeowner.  If you have to evict you work thru the normal eviction process in your state.  

The biggest difference between renting and rent to own is the above and also that 100-200 bucks of the rent money goes towards a credit that is given at the end of the term if they buy the home.  If they don't buy the home then they forfeit their deposit and recieve no credit money.  Its important to get a nice deposit (say 1-4K) so you keep them in the game and so they work on getting their credit repaired, making strides to get financing, and keep the home in order.    

Nate-WI
Nate Andree
NJA Investments LLC
njainvestments.com
920-428-9858
[email protected]

Offline bluechipdc

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Re:Bank Owned/REO's
« Reply #22 on: October 12, 2006, 08:11:45 pm »
I think REO success depends on what is happening to the real estate market in your area.  

2 quick REO stories.
My first investment property was an REO.  
ARV"Actual Sold Price" = $126500.00
Construction Costs = $20150.00
Purchasing, Selling, Carrying Costs = $11929.00
Profit = $11921.00
Purchase Price:  $82500.00

I offered the bank $82500.  They came back and said "no way" since the list price was $99K.  Then they said that they would sell it for $87,500 and give me $5K back at the closing table.  This was great because it actually reduced the amount I had to bring to the table and I got my price.

My next REO is the house I live in that I purchased in 2002.  House was listed for $649K, then sat on the market for a couple of months....right before the market started to get hot in our area.  Was reduced to $599K.  The house was easily worth $600K, and I offered $555K they countered and we settled on $565K.  Not a great discount, but they accepted the offer, I think, because I told them I could close in 12 days.  My lender said to give them at least 30 days to get it done and the bank was fine.  We presented the offer with the loan approval letter and they did not care when we closed.

I think many would agree that banks are quickly becoming more flexible as foreclosures are on the rise.....along with short sales and banks having to take back more properties.

An offer on an REO I recently made was not accepted.  The agent held out and got $60K more than I offered.  But, the agent did respond and came back with what the bank would accept...which was about 35-40K more than I would pay.
18 months ago, the agent probably would not even have responded to my low offer.

To your success!!
« Last Edit: October 12, 2006, 08:14:30 pm by bluechipdc »

Offline machismo

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Re:Bank Owned/REO's
« Reply #23 on: October 14, 2006, 12:46:35 pm »
You are correct, they don't care about it needing repairs.  What they do care about though is if the property is in such bad condition that no one wants to buy it.  If you let them know in the comment section that you are deducting the price because of fixes they will notice.
do you use agents to submit offers or do it yourself ?

Offline gordo2417

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Re:Bank Owned/REO's
« Reply #24 on: October 14, 2006, 02:42:55 pm »
You have to go thru an agent to submit an offer on a REO or at least go thru the listing agency to write an offer.

Nate-WI
Nate Andree
NJA Investments LLC
njainvestments.com
920-428-9858
[email protected]

 




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