I am very excited by the fix and flip model with REO properties. I have invested in training and ongoing coaching and am convinced that the 65% of ARV (less repairs) is the way to go.
I have been having a tough time finding deals in my area (Spokane Washington). The banks who own these properties seem unwilling to consider offers anywhere near these numbers.
Help! Any advice?
Prices depend on your area and the competition the banks are facing in trying to sell their properties. They are like most retail sellers in that they are trying to get the most money for their property. In my area (southern NJ) you would be hard pressed to find banks selling properties at 65% of FMV except in the battle scarred neighborhoods that I will not deal in. I’ve made around 20 all cash offers over the past 2 years at between 50% - 70% of FMV from the banks and have not had had a single offer accepted. In this area at least, the banks seem to be on a schedule of dropping 5% or so on price every 30 days until sold. I’ve watched a number of these properties I was interested on sell to other investors who rehabbed them and then they sat on the market for up to a year. I don’t know how they made ANY money (maybe they didn’t).
I still find it most productive to advertise for distressed owners and contact owners of distressed properties that are not currently on the market.