Real REO success & failure stories

[S Man]

A while back there was a helpful thread where people talked about actual, specific experiences with REO's. Many of these stories ended in banks not accepting the offers (which is good information because a lot of people need to realize that it takes a lot of offers before you get one.)

So, here's my first REO story. I'm in Atlanta. In May '08 I found a great brick duplex in high-end neighborhood inside the city by scouring websites. Found the foreclosure notice buried online (it hadn't been reliably listed in any of the MLS systems). Got myself a REO specialist buyer's agent, found through this website. Went to look at it, along with 5 other properties that day that did not meet my requirements.

The agent called the listing agent for the code and to confirm it was still available. It was in great shape for a 1920's bungalow. Needed some minor work but was separately metered, good electrical, and basically could be rented out in 2-3 weeks after closing.

Did all my calculations, and it would NOT have cash flowed positive, even at $1500 rent per side. Now, we all know we're supposed to walk away at that point, BUT we saw this as a potential future primary residence for us, and were willing to take a hit for 1-2 years because all other area properties were selling $475k-600k and the bank asked $417k for this one and it foreclosed for around $480k on the mortgage.

A week later I had a structural engineer look at some step cracking in the brick, and he said it was no major problem, a very solid house. That meant I would make an offer, probably around $370k on a $417k ask with about 1 year DOM.

While we were there I noticed a bunch of things had been moved into (and out of) the house. The for sale sign was still up and the lockbox still on the door. I called my agent to find out what was going on. It took him 2 days to get the listing agent to call back, who said it had been sold and closed A WEEK BEFORE MY AGENT HAD EVEN TAKEN ME INSIDE. So, I was looking at a potential purchase that had already been sold.

Even the attentive REO managers and listing agents are overworked and can't keep up with their own properties. So, the search continues and I await the county records being updated so I can find out what it sold for.

End result = NO SUCCESS

Any other entertaining stories?