I’m in Austin, TX which is seen as one of the best RE markets in the country. Here, you can’t get REO’s for < 70% ARV, and you’d be doing good to get them at 80%. So those numbers aren’t good for investors.
So I hear & see a lot of “gurus” talk about buying REO’s, getting pocket listings, etc. So it seems to me to be a waste of a lot of people’s time (Realtors, etc.) & $ to buy the “guru’s” REO course. It may work in FL, OH, CA, AZ, and maybe in Dallas & Houston; but not here in Austin.
Thoughts?
Hi,
Typically an REO property will not be sold for less than 15 to 20% below FMV, now with that said in a good market an investor would try to find properties where value can be added.
In your market if your willing to rehab (Fix & Flip) you can pick up additional profits, however you have to be willing and able to buy a property with large enough of a margin to make a profit.
A bank or lender will also discount a property not only a 15 to 20% below FMV margin but also the estimated cost’s of making repairs and doing defered maintence and any remodeling or updating required of the property.
In order to make a profit however you can not buy a $30k house for $15k needing $20k in repairs so you have to find properties with appropriate value and margins to make a profit.
Good luck,
GR
It’s a numbers game, same as dealing with private sellers.
Most of your offers will get rejected, but some won’t.
Most of my offers get rejected by the bank, too, but every once in awhile I get an acceptance.
They tend to be more willing to negotiate on properties that have been sitting on the market for awhile and also the ones that need a lot of work. If you’re trying to get houses in sought after neighborhoods that are in great condition, the bank is going to be much less willing to drop their price.
I know people in WI, PA, FL, OH, IN, NJ, AZ, GA, who are doing well with REOs. My guess is if it works in all of those places, it probably will work where you are at, too. If you already have it in your head that it will not work, though, you might have a problem.
Steph :cool
I’m thinking about moving to austin texas… Is anyone out there doing reo deals by any chance; or short sales, rehabs??? Post any experiences you may be having in austin