I am a beginning investor…I have been looking at several REO properties and am meeting with the Realtor in a couple days. I am looking for input on the following topics:
1)Any experiences on investing in REO properties
2) Can I assign a purchase contract to another investor (or wholesale) with a REO property?
3)If I can’t assign the contract, would a double close be permitted for a REO property, so I can buy it and immediately resell the property?
4)Is there a rule of thumb for a minimum percent under market value to achieve for the purchase price?
5)Estimation of total closing costs.
In my experience, you can’t assign it. Most (if not all) state that in their addendum. Since they are going to require you to show that you are pre-approved with a lender (usually when you make the initial offer), it just makes sense that you can’t assign the contract to someone that may or may not be financially qualified. Your lender can give you an estimate on the closing costs. Good luck.
A pre-approval letter from a hard money lender will be sufficient for proof of funds. I once work with an REO in an assignment. They don’t like it and its difficult to pull off but it can be done. When we tried to “switch the names on the contract” the bank wanted the contract withdrawn and resubmited.