What is the best method for assessing REO deals? banghead I think i have come across some good deals but i don’t want to make an offer that will end up not being attractive to my end-buyers. Of coarse i want to get them under their assessed value but how can i determine a realistic value? Also, once that is determined should i be offering the bank 50-65% of the value? Please give your thoughs, thanks.
Since your posting is under the category of Bird Dogs and Wholesaling, I am assuming you want to wholesale REO properties. Good luck! From what I have learned, banks or their Realtors won’t accept contract assignments and they also want you to pay $500 to $1,000 escrow up front.
One way around that is to use transactional funding for an A to B and B to C deal. You get an end buyer to agree to settle on the same day as you and use the same settlement attorney. You borrow funds for one day from the transactional funding source to buy a house and the end buyer closes their deal right after you buy the house. The transactional funding source gets their funds when the second part of the deal closes.
Im already quite familiar with the back to back closing strategy. What im asking is what indications do you look for that makes an REO a good deal?
Evaluate an reo deal by the criteria in which your buyers have told you they are looking for.
If they want a 3bedroom 2bathroom split level home built in the 1980s located on the east side of town with hardwood floors and they are willing to pay up to 45k for the deal as long as purchase and rehab leave them at or below 65 percent LTV then that is the criteria in which you are looking for in an REO deal.
Just know what your buyer(s) want and take that criteria into consideration when you are evaluating your REO deals.