Posted by Nate(DC) on December 13, 2001 at 11:26:22:
Because even in Baltimore, home of more lender-owned homes than you can shake a stick at, you’re still only going to get maybe one out of 20 to 30 offers accepted that are less than half the asking price. In markets like Washington that figure would be closer to zero…
REO what to offer! this junker in great neighbor - Posted by Tim Peris
Posted by Tim Peris on December 10, 2001 at 21:26:46:
There is a junker in an area of my town that is bank owned and they are listing it with a real estate agent. It’s been on the market a few months now and needs around $50,000 in repairs. The house is worth fixed up around $129-135k. The bank wants $90,000 for it!!! They gotta be kidding!, the original owner bought it from sheriffs auction for $14,000k!! and I’m assuming refinanced it for 80+k then went into foreclosure. Based on my estimates of repairs, holding costs, purchase costs, sales costs, and my profit I’m thinking of offering an all cash offer of $38,000. Does this seem reasonable for a house that is in obvious need of major repairs that has good potential.
Re: REO what to offer! junker in great neighbor - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on December 11, 2001 at 20:58:47:
Based on what you said and piggybacking on David Krulac’s comment, I’d say the bank is a little high, but probably you are very low.
Value fixed up: $130K minus fix-up costs of $30K equals actual market value of $100K. They are asking $10K. This is too little of a discount to make the property attractive to an experienced professional investor–not enough profit.
Now, you should probably offer what you suggest to see what happens. But don’t be too surprised if somebody offers them $75K or $80K, and gets the property.
Interestingly enough there was a post here a couple of days ago about a lender-owned property for sale at $5K. The fixed value would be about the same as the one you mention.
If you can, encourage a counter offer to your offer. Be prepared to pay more, if it makes sense to you.
Good InvestingRon Starr***
Re: REO what to offer! - Posted by SCook85
Posted by SCook85 on December 11, 2001 at 14:44:24:
If your figures are accurate let your offer fly. I would say that it is unlikely it will get accepted but you don’t know if you don’t offer.
I would suggest that you take a closer look at your repair estimates. I have rehabbed some UGLY properties and I can’t come close to spending $50,000. The most I have spent to date for a TOTAL renovation is $33,000 and the home was very rough. I’m getting ready to start on one of the worst homes I’ve ever done and my estimates are at $30,000.
I hope this helps,
Re: REO what to offer! - Posted by Becky IL
Posted by Becky IL on December 11, 2001 at 11:27:26:
Tim, your suggested offer is right on target. It doesn’t matter whether it gets accepted or not - you must buy at the right price. There is nothing that’ll hurt your business more than if you pay too much for a property.
Make the offer… - Posted by David Krulac
Posted by David Krulac on December 10, 2001 at 21:29:45:
it costs nothing to make an offer and the worst that could happen is that they say no, then you regroup, possibly negotiating.
Re: REO what to offer! - Posted by Steve-DC
Posted by Steve-DC on December 12, 2001 at 11:16:10:
Why do you think the offer is unlikely to be accepted?