I’m interested in submitting an offer to an REO listing I found from BofA. The thing is, this will be my first REO offer I will be submitting and will need a bit of help. One problem is that I live about 5-6 hours away from this property.
SUBJECT PROPERTY:
MARTHELLA AVENUE & YOSEMITE PRKWY
MERCED, CA 95341
SFR 3/2 - 1,372 SQ/F - Built 1955 - $84,600 Bank is asking
Comps Using ICO:
0.38Mi Away - Sold 08/24/2007 $196,000 - 1267 SQ/F - SFR 2/1 - 1941 Built
0.15Mi Away - Sold 07/13/2007 $190,000 - 1486 SQ/F - SFR 3/1 - 1955 Built
0.29Mi Away - Sold 12/29/2006 $221,000 - 1000 SQ/F - SFR 3/1 - 1950 Built
Going by the those comps, would it be correct to assume the ARV is somewhere in the 160-170’s?..considering how far back the sale dates were.
So, assuming ARV is 160K x .70 = 112K - 15k approx repairs = 97K
Which brings me to my next question, How do I go about finding what repairs are needed if can’t see the property myself? Looking at the picture, it appears that some work was done but not complete. Windows appear to be upgraded.
What is the correct procedure for submitting an REO offer?
If offer is accepted for 84K, my exit strategy would be to possibly quickturn to another investor at 97K. I just need to find a buyer in that area.
Again, this will be my first time submitting an REO offer so any guidance is greatly appreciated. Please let me know what else I should be looking into.
You don’t sound like you are ready to do this. From reading your post, I would advice that you do not. Your first REO should probably not be so far away from you. You should probably be a little more hands on in case things don’t work out the way you plan.
Based on the sold comps I would say that your FMV guess is pretty close. I could even drop a bit more to the $130k to $150k range depending on who does the BPO’s. Working with those number the only way you will get it below $100k is if:
the property has more than 120 DOM
substantial rehab needed
the bank loan which foreclosed on was for less than $100k
Contact the listing agent and ask them if they can provide you with the BPO they conducted for the bank. Ask them to ask the Asset Manager for the property if you could have the BPO’s they have on the property. Generally the Asset Manager won’t care, it is a simple matter of attaching a PDF and sending an email.
Thank you for your reply and informative details. Its a good feeling knowing someone more experienced is willing to share their knowledge and expertise. I will do as you mentioned and contact the listing agent about the BPO.
You are correct also that this may be out of my reach considering my first REO. However, I am willing to do the leg work and get something done as opposes to sitting in the side lines.
I posted a list of CA properties I obtained from two different asset managers at the above thread. Some of the properties are listed and some are pre market (which means they have not yet been listed) Skim through that list and see if there are any properties near you that you may be interested in. If you are interested in anything and would like to put in an offer, I’ll see if I can help you out and ‘influence’ whichever asset manager has that property to seriously consider your offer.