Purchasing A REO Property
Looked at REO property that was taken in foreclosure the property was on the market for about 5 months and was taken off now its back on at price of 229k. It needs works, I have gotten comps from BOA, Ditech and Quicken and values range from 250k -339K. Question I have is how do I go about figuring offer do I take the repair estimates + holding costs + taxes/liens + my profit and subtract that from what am willing to offer ? Is there anything that I missing here, can anyone suggest anything that I may be missing or possibly a better way of doing the offer. Thanks in advance for any help ...
First off you need to look at your comps. That is a big range. Have you asked an appraiser for a pencil search (quick search - no cost) or had a real estate agent do a CMA for you on it? Especially market timeframe for sales in similar homes.
For repairs you need to get 3 professional bids, then price materials and then est. labor yourself based on day labor rates in area, so you know what diffrences in doing yourself with a day labor crew vs. professional contractor work will cost, and timeframes from completions on each. Which is faster and ultimately cheaper for you?
You need to know exactly any leins, taxes etc..that should be easy with a lein search or directly from the bank that currently owns the REO, they will ahve all this with their title info for the property..
Most importantly to gauge you profit, make sure of marketing time. Do you in fact need a realtor to sell at top dollar or not? Also is it an area where your buyers need downpayment assistance which is basically you paying the downpayment for them, so minus that figure from profit gross.
These are things you need to find out to make it an investment not a money drain.
The question was, how do I go about figuring a offer??? Is there anything that I am missing??? Meaning, what other associated costs are there to figure in my final MAO.