Where are all the deals?

[Greg P.]

In my market there is definitely a shortage of properties right now that are priced so the rehabber can make a profit. For example, once a property goes on the MLS, by the time it gets listed, it has multiples and it's not a deal anymore. I've been hearing from fellow investors in my area the same thing. The buyers aren't buying as much and the rehabbers are having trouble finding deals. This isn't just REO's btw, it's shortsales, sheriff sale properties, etc. Sigh.. tough times..

[Mark D.]

There is no question that the banks are sitting on inventory. They were banking on selling assets as the market recovered.

I work for an REO Broker in L.A. and almost all of our REO listings fall out of escrow at least 2-3 times before closing. Because of the fierce competition that you are describing, buyers will bid up the price just to get in escrow, then perform due dilligence and ask the bank for a reduction. Most the time, the bank won't give them the reduction they want and it will fall out of escrow. My advice, monitor these properties to see if they fall out of escrow. I sold a condo last month that fell out of escrow 3 times initially, so the bank got fed up and slashed the price by $75k because they realized they were asking to much. Because my buyer had already done his due dilligence previously on the property, he was able to offer cash and waived all contingencies.

Also, you may have better luck right now searching for REO or probate properties that are overpriced and have been sitting on the market for a longer time. These properties have to sell and since they have been sitting, they are off the radar of most investors.