Flipping reos to Owner Occupants? Whats the best Way? Do we use the 70% formula

Flipping reos to Owner Occupants? Whats the best Way? Do we use the 70% formula? Might as well go for it? or not

How do you flip an REO to owner occupant?

Can you wholesale Reos to Owner Occupants ? Whats the best way?
Do you still use the 70% formula if they are almost turnkey ,minor cosmetic ,just paint and carpet?
Yr 1986
List price 100,000
Arv is 125,000
Repairs 5,000 if that
Fee-5-10,000
1.)
65/70%
2.)
Or just -20,000
3.) just stick to the formula 65/75% always?

I’m unclear about your question. If the property is an REO then how can there be an owner occupant. By the very nature of an REO it is owned by the bank and always empty.

selling to o/os…

Are you selling the property without a realtor? What about closing costs? Holding costs? I don’t know why you are paying so much for an REO. There is very little spread here. Looks like a crap deal to me.

I am wondering if you understand the Maximum Allowable Offer (MAO) formula that you are talking about. The 70% is the MOST an investor should pay and this is a tight market. Right now in most markets owner occupants are around 70% and investors are between 40-50% which is where you should be buying at. Owner occupants in this market are for the most part buying houses at least 15% below tax assessed value unless your town was one of the very few that lowered assessed value when property values went down.

70% of the ARV - Cost of Repairs = MAO
70% of 125,000 - \$5,000 = MAO
\$87,500 - \$5,000 = MAO
\$82,500 = MAO

So you can sell it at \$82,500 if you are using the 70% formula (MAO) and you bought it for 100K ---- Ouch!!!

You’re not being very clear with what you are trying to say and your numbers.

my main question is if the list price is 100,000(arv 125-150K)

or 60,000 arv ,80,100,000K , do you have to use the 65%-70 formula every time or can you just mark it down 20K and flip it

Propace,

Im also struggling with numbers.
But if the arv is 125-150 I would go with 125k. Thats just me but you would have to check why a house sold for 125k - was it a fixer, rehabbed? And then re evaluate again.
So Like Hooch said:

70% of the ARV - Cost of Repairs = MAO
70% of 125,000 - \$5,000 = MAO
\$87,500 - \$5,000 = MAO
\$82,500 = MAO

But if your going to wholesale it and you found an investor whos willing to buy it 100k or so then thats his business. Go for it.

Maybe this scenario is the exception. But I would stick to the formula of 65% thats what I use.
I hope I didnt sound confusing.

I think you all are putting to much into this. Buy for a deal and sell on a deal to a buyer you should have. minus expences, a flip funder, realtor etc. get 5-10-20K quick and simple - Thank you by by. Do it again. Now if you need time to rehad and don’t have a buyer then apply your formula. Herbster

ok now we are getting somewhere…Prestons REO rockstar say something about 100K props -20,000 and 50,000 props - 10-15K

So you five me and example how you would do this one

reo list price 100,000, arv at list or to 125,K repairs 5,000 maybe but almost turnkey paint carpet,yr 1985, 3/2.1200 sf
dom 1-2,fee ?5K? how would offer to the bank or your wholesale formula to investors or o/os?

propace, Read the Foreclosure negotiators post in the short sale forum below. Its good. Herbster