Posted by Robert on November 27, 2006 at 17:52:49:
Hi Pete,
Care to share how I might get in touch with lenders that will let me bid on REOs? I am in So Cal.
Thanks
Finding the Rehab - Posted by Jeff Payne
Posted by Jeff Payne on November 13, 2006 at 10:22:03:
I am in the Richmond Virginia Area. I am always looking for the next rehab property. What is the key to finding the undervalued home for rehab projects?
I have access to MLS, but that is not the place. You may stumble across one now and again, but MLS is pretty well top of the food chain for rehab valuations. What is the absolute best way to find a good rehab property?
I have a credit line with Equity Development Corporation, so I am set financially to make a deal. Just having problems finding the right property.
Network - Posted by Jimmy
Posted by Jimmy on November 16, 2006 at 07:45:49:
I looked at 20 rehab houses 2 weeks ago, and learned about 8 more yesterday. they came at me from different places. But the one place good deals NEVER come from (for me, anyway) is from the MLS or brokers.
deal #1 came from a housing agency. I have Section 8 tenants from 5 or 6 different agencies in East TX. Every now and then, I call the Directors of these agencies and chat them up. I always ask them if any of their landlords are lookng to sell. that’s how the 20 property deal came at me. still negotiating it, so it ain’t a deal yet. but a nice prospect.
deal #2 was a newspaper ad. I read the real esate sections in several local newspapers (online versions). only takes a few minutes. have found many deals this way.
other ways: (a) make sure the tradesfolk (plumbers, electricians, property managers, carpenters, etc.)with whom you work know what you want. They are in the field every day and will find out about stuff. Make sure they know that they will get the work doing the rehabs. (b) drive around. I have stumbled on a couple deals just by driving the neighborhoods. One time, a guy was hauling drywall into a house. I asked him about the project. the next day, he sold the place to me, and I finished the rehab. he was out of money. another time, I sent a letter to the registered owner of a house next to one of mine. boarded up for over a year. he lived in a far away place. he was pleased to unload it. [to be fair. I have sent 50 letters like this, but hit only once.]
by the way, it really helps if you are fishing in a well-stocked barrel. The towns in East TX (Nacogdoches, Tyler, Longview) are loaded with neighborhoods built in the 1930-1950’s, with thousands of houses needing renovation/reconstruction.
good luck
Re: Finding the Rehab - Posted by Pete CA
Posted by Pete CA on November 14, 2006 at 02:21:29:
I have had the most luck working with REO agents and Bank Owned Properties. Research how much the bank purchased the property back for and make an offer a little under that. If they want to move they property they will likely consider your offer. What is the worst that can happen? The could counter significantly lower than what it was listed for like what happened to me. A house was listed for $150,000 which needs about $20K in work. It’s worth $170K-$180K fixed up. I offered $110K and they countered at $117,500 (they bought it back from the previous owner for $126K). I have it in contract right now and have multiple offers at $130K, $135K and $140K. After I got it under contract I put ads in the recycler, craigslist, and any free ad newspaper I could. The best response came from Ebay and craigslist. Just an idea. Make offers! What’s the worst that could happen? 
Re: Finding the Rehab - Posted by Bill Jacobsen
Posted by Bill Jacobsen on November 13, 2006 at 13:20:20:
I am looking for undervalued homes whether they need rehabbing or not. I am sure that many readers have their favorite ways. I look at several MLS’s, Craig’s List, and everyone I know knows that I am looking for houses. One person acts as a birddog and gives me about 20+ properties per week. He gives me every FSBO sign and the address of any other house that looks vacant. I track down the owner and ask if they are willing to sell.
So far, I have actually made better money finding undervalued houses that needed little or no rehabbing. The point is, look for anything that can make you money, not just rehabbers.
Bill
Re: Finding the Rehab - Posted by DaveGF
Posted by DaveGF on November 15, 2006 at 14:13:57:
What is your method for finding bank owned properties?
Re: Finding the Rehab - Posted by Pete CA
Posted by Pete CA on November 14, 2006 at 02:23:19:
What have you done with the undervalued homes that need little or no rehabbing? How do they make you better money? Thanks for the insight.
Re: Finding the Rehab - Posted by Pete CA
Posted by Pete CA on November 17, 2006 at 06:39:58:
A good friend of mine works with Lenders all over the country who have foreclosed on CA properties. He tells me to offer whatever I feel like offering and he proposes it to the banks. The banks want to get rid of the house, the REO agent wants a commission and I want a cheap fixer/rental. If they accept the offer…sweet for me, if not oh well. So far so good.