maybe it wasnt a deal!

General Real Estate Investing
1

hey guys( gals )

I recently made an offer on my first investment property,I thought I had done my research well and had found a decent deal. the property is a 3/2 bath in atlanta for 55k, homes in the same subdivision had recently sold for 80k-110k, I figured this home when fixed up would be amongst the bettter homes in sub, and appraise for 100k.It was in need of only minor cosmetics. so I made an offer. my lender came back with their appraisal and said that it would only be worth 85k after repair, this of course threw my numbers out of whack and now its not really a deal!( presuming their appraisal is correct) with the offer I gave 1k earnest money and being as I was purchasing the property “as is”, there were no contingencies in the offer.

what should I , can I do about this, first deal and I really dont wanna get burned, if any body could help I would appreciate it

thankyou

2

At worst if you haven’t closed on the property you could lose your deposit and probably pay for the appraisal that the bank did. Lesson learned here is that make your only contingency a financing one so if the appraisal comes back you could say (or in your lenders rejection letter) that due to current appraisal the lender cannot fund the deal. Every single REO I bid on has the financing contingency. I just had this very thing happen to me 2 weeks ago. Had an accepted offer and the bank didn’t want to fund the property with the numbers that were presented and sent the rejection letter to the lender. I’m not out my 1K deposit but I did have to pay for their appraiser.

Nate-WI