Tips on buying foreclosures

[Cecilia Cave]

Hi there, we are a newbie investor who currently own one property and waiting to close on our second one. Our target is SFH in our local area in Haughton/Bossier Louisiana. We had issues with closing a deal because the sellers were not willing to fix major issues that we asked for (we walked away with 3 so far and wasted our time and money). We saw this foreclosure property that was relisted due to the buyer's financing fell through) and we made an offer on it (pending approval). Is buying REO or foreclosures better since we would know from the start that the property is SOLD as IS? Thank y'all for your opinions in advance!

[Will Fraser]

Hi @Cecilia Cave, welcome to the Biggerpockets forums!  I'm sorry to hear that you've struck out on the last three purchases!

One mindset shift that I would encourage here is this: ANY property can be purchased as-is. The fact that REO properties are always AS-IS has nothing to do with the fact that many sellers of real estate are offering their property subject to inspections and negotiations on treatments, repairs, and replacement. For my money I'd rate buying from a human as WAY less risky than buying from a bank (after a human who failed to pay their debts was pried from the house and it sat for some number of months or years before the bank disposed of it). If you find a deal that pencils out, don't get hung up on what the sellers will or won't fix. The fact that you even know about the issue is a leg up over REO in the vast majority of cases.

Also remember:  the TRR negotiation is just that . . . it's a negotiation.  If you are in a hot market then this negotiation is tilted towards the seller in a way.  If you are in a cold market it will be more tilted to the buyer.  So, it's probably not tilted your way right now and that's a good thing to note when making the list of demands for them to fix.

Good luck in the hunt, Cecilia!