HI everyone i have a bunch of q’s but not enough space for all so here i go … I have looked into purchasing a REO home around my area and it looks like a fair deal. The market value of this property is near 90,000 to 100,000 and its price is about 49,000. i was approved for a 100% loan, Are REO’s a good investment? I plan on buying, rehabing as much as i can afford, then reselling the house, its sounds like a good idea to me but im not experienced at all!
Yes, REO’s can be a good investment. The key is your cost of repairs. If it’s going to cost you 14K or more to fix it up, it may not be a good deal. I use the formula 70% of ARV - cost of repairs. In your example 70% of 90,000 is $63,000 so if your repairs are 14K or less than $49,000 is a good deal.
let me know how it goes, im a new investor too and i am excited for you - you cant have too much support
thanks alot for your response wood. ill take your formula into thought when analyzing my deal. And ill let you people know how it goes. thanks for your support