Potential Deal

Hello All -

I am a beginner in the REI arena. Just recently, I was sent a listing by an agent about a bank owned property. The property went through a foreclosure, and now is owned by the bank. The list price on the property is near the FMV. Of course, there have not been any negotiations thus far.

The listing states that the property needs cosmetic work throughout the house. The property is being provided “As-is”, and there is no detailed report from the bank on the potential repairs that might be needed in the property.

My questions is, where do I begin?? Should I put the house under contract, then have a contractor come out and give me an estimate about the repairs? Initially, my game plan is to wholesale properties. I am in the process of obtaining a pre approval letter from a lender, since the bank is asking one for any offer received.

I have never done a deal before, and therefore need to know what steps to follow in order to make this a deal. Can someone please advice.

Thank you!

In my opinion, wholesaling is NOT for beginners, so I’d suggest a different route.

Also, there is no way that this property would be a candidate for wholesale. It’s listed at ARV, which means that you’d have to negotiate the bank down to somewhere around 50% of asking price before you’d be in a position to wholesale. That rarely happens and very rare indeed from a beginning investor.

On top of that, it is an MLS listed foreclosure and every investor in your area should already know about it. If they want it, they’ll get it direct.

If you’re still interested, the first step would be to actually set up an appointment to see the property and see for yourself what kind of shape that it is in. From that point, if you don’t have a clue what it is going to cost to fix what needs to be fixed, then yes, you’d need to have a handyman/contractor to do a walk-thru to give you an estimate of repairs.

From there, if the property is still available, you’ll have some groundwork to base your offer.