Bank Owned Investment Property
I am new to the investment process and I am looking at a duplex that is bank owned and has been sitting vacant for about 6 months. As an investment point of view is it better to stay away from buildings that have no tenants and go with the ones that already have tenants in them? Should I be concerned that nobody has bought this property for so many months? The area is average and there seems to be several other apartments for sale in the same area. (the property is in los angeles, ca. )
Once a bank forecloses the tenants go, so any bank owned property will be unocupied -at least that is the case here. And there is so much on the market, and so few buyers, that it is not unusual for a property to sit for many months.
Look at this as opportunity. By now the bank is desperate to get rid of this property. Your goal should be to pick it up for about 65 times the monthly rent. Try offering 60 times the expected rent and see what happens. I know this is absurdly low in California, but lenders must realize that this is where things are heading, and may be ready to take what I consider a realistic offer for an investment property. All they can do is say no or counter-offer. Then wait a while longer, until the next price drop, and try again.
Let us know how things turn out!
Chris
Hi,
Thank-you for your reply. The bank has this duplex for $589,000. So if the rents are between $2,400- $3,200, I should offer them $142,000 - $192,000?
Thanks so much!