a nice REO in middle class neighborhood
Asking $62000
will offer $58000
10k in repairs
ARV 85-95k
This will be low return but, not bad for a first flip. It is the perfect flip home, just messed up! no big damage at all. Big backyard. Here’s the thing…We are expecting to close on our other home in new mexico (we just moved here to St. Louis) on the 31st of Aug. That profit will be our security when looking for financing (I was laid off. See other posting [need clairification on HML’s]. I need to make an offer now to secure a deal and they need a pre-approval letter. Any helpfull advise on how I can pull this off?
One of my HML’s has an instant pre-approval letter on his web page. These are not that difficult to get because they are subject to inspection, appraisal and a laundry list of other hoops to jump thru before the commitment letter.
Your numbers are close. At $90,000 ARV and 70% LTV you will be able to borrow $63,000 which is a bit short to do 100% financing. You may do well if you can turn it quickly. You may start with a $50,000 offer to see if you can get some more room.
Can you let me in on your little secret? : Who is your HML?
When you said offer 50k, that made me wonder, how much does the bank add to pad the profit when it comes to REO’s?
I am not too sure they are adding anything for a profit. They are probably just trying to get out as much as possible and even trying to keep from losing money. I do not know the bank you will be dealing with or the condition of the property but they may take the offer or counter but it will not hurt to offer less especially if it has been on the market a while.
The HML I am speaking of is DHLC and they are located at DHLC.com. I believe they only do Texas.
Saw you posted a spread sheet that was linked to DHLC and a website; but I was unable to pull that up. Could you give me the info again–I get to the DHLC site but don’t see the spreadsheet option, when I put in the exact address you give it won’t come up.
Thanks, Betty
Do you mean the pre-approval letter. It is under their tab About Us. It is a PRF format where you can add your name and loan amount etc. Freeking Hi Tec to me
Sorry, no, not the approval letter. Maybe I am getting you confused with someone else. I am referring to a spreadsheet that helped with understanding potential profit.
The only thing I am sure of is that is was linked to DHLC and you referenced that site, so guess I linked you to the post in question. Looks like I will have to go searching.
Thanks Ted, found it and used it. Question for you, the only thing I wasn’t familiar with was the term “assignment fee”, do I know that by another name? Did not put in any value, could you explain that one?
Assignment fee is what you may pay a wholesaler to locate a property for you to purchase. The contract price would be the amount you pay the seller that the wholesaler has it under contract at and the assignment fee would be what you pay the wholesaler either at closing or earlier.
Who is your HML?