Is This Worth It?
i posted to another forum this question but I think maybe this is a better place for my question. So here's what happened to me in the new town i'm moving to. I looked at some repos and ran the numbers and gave an offer. Here's the numbers
3/2 repo bank will only take 56,900
FMV 80,000
repairs 10,000
So i put in an offer for 35,000 and got told that the agent for the bank said don't even bother. I had looked up a comp on the same street that was 56,000 and a 2/1 so I thought they were a little overpriced on the asking price hence the reason i went lower. My agent went on to tell me that a 10% below asking price in this town (only 35,000 people) is considered lowballing. Where i live 10% is the norm if you weren't trying to invest. She also said that most houses go for their asking price or maybe 2-3% below. BTW - i asked for sold comps but i didn't get them until the day i made my offer. I was in a rush because I was traveling that day to go back to where i'm from. Anyways, of course I ran the numbers at that range and they don't look good. This is the same range of numbers i've seen over and over on the comps for rehabs. If that's the case, how will i make any money?
now here's where it gets trickier...i don't have a job in the sense that a bank thinks yet i have money in the bank and a good credit score but not enough money to buy. What would you do
What I am finding with the REO properties is that by the time it hits the multilisting service and if it is in a good neighborhood, forget getting under 10%. Not that it cant be done, but there is sort of a good ol boys club bewteen the agents & bankers. Run an ad in your local paper that you buy houses, particularly pre-foreclosures. . .get the people to call *you* - both you and the homeowner still have control and they are WAY more motivated than the bank once it takes over.
now here's where it gets trickier...i don't have a job in the sense that a bank thinks yet i have money in the bank and a good credit score but not enough money to buy. ---> Hard Money Loan...do a google search.
I'm confused. You said a 2/1 sold on that street for 56k, so you offered 35k for a 3/2? I don't get it. Sounds like the bank's wanting Retail for a Repo house needing much repairs. REO's are like that, they want full market value for a house needing repairs, I'm discovering. Just downright silly, if you ask me. Now it might make sense for maybe a retail buyer to buy something like that, but an investor, it'd be pretty tuff....
Remember the agent is working for the seller(bank) and their best interest. Plus the more the agent gets for the house the larger their commission. To pay for the house and rehab get a hard money loan to supplement what you need to finish the project.