Need Advice On Foreclosed Property!
I have found a property that I would like to make an offer on. It is a foreclosure that needs minimal work. It's listed by a REO agent. Asking price is $86K. That's probably close to FMV. When it foreclosed on the balance on the mortgage was about $71K. I plan to rent the property for about $800/month. What do you guys think I should offer? Also, I want to purchase this with as little money out of my pocket as possible. What is the best way to do this?
Thanks
David
We probably need more info to give you a good answer. Keep in mind that with a bank REO you don't have a motivated seller that will carry a soft second.
Hi,David
You did not say whether you are talking about net money out of your pocket or money out of pocket period. If you can buy with cash, you might make a low initial offer (maybe $65K). See where they come back with a counter. $68.8 K is 80% of FMV. You can then get an 80% loan to finance your cash back. At 6.5% 30 year fully amortized payments are $448.77/ month. Make your offer with few contingencies, but ones you can live with. How they respond will depend on how things are in your area.
If you need to borrow at time of purchase you are likely to get 80% of the minimum of purchase price or appraised value. You need to look at your cash flow if you can find a loan over 80%.
I hope this is of some help.
Regards,
Ed