Submitting an offer on a bank owned property

[Ahmad Nassar]

Hello everyone,

I found a great multi-family bank owned property in the Cincinnati area. I believe the property would make a great BRRRR I want to submit an offer on it but am kind of confused on which steps to take first and have some general questions.

1.) Asking price. The property seems to be listed overpriced. By a fairly significant amount. I pulled the best comps I could in the area and have determined that the Listing price is actually more in line with the ARV. I followed the Maximum Purchase price formula = Sale price - FIxed costs - profits - rehab cost and came up with a number 60k less than asking price which just seems like a very low likely hood of getting accepted... Is this common amongst Bank Owned properties?

2.) Offering the deal. From the research, I have done on REOs I've learned that banks prefer cash offers and will sometimes take a lower price on all-cash deals but I have also seen that some banks prefer first time buyers. Does anyone have any recommendations on whether to pursue an REO as a First-time buyer vs all cash?

3.) Funding the deal. I believe right now my best chance of getting this under contract is with an all-cash offer. Does that mean I need to contact a Hard money lender prior to submitting an offer or only once under contract? and If I do get it under contract all cash and 10 days to close what if I am unable to get the loan necessary am I out of my earnest money at this point?

4.) I have a partner that would be invested in the down payment required for a HML. Does anyone have a Hard money lender recommendation for a first-time Investor in cincinnati?

[Mark Weinstock]

Just wondering who your dealing with?  I'm a total amateur and  I was able to grab a great deal on a REO by dealing directly with the banks listing agent by cutting out all the middle men realtors the listing agent was much more motivated to sell as he makes 100% commission. 

I was also able to cut a pretty slick side deal with the agent.

I made an low ball cash offer I had the money in the bank and the bank like met me half way the realtor was trying to play me saying hes never seen the bank drop so much on there pricing and there was absolutely no way they will go any lower so I told him what ever amount you can get the bank to drop from there final offer i will give you 10% cash in his pocket.  Like the next day he came back and got them to drop 30k  :) 

This was back in 09 when there was REO's everywhere unforgettably things have changed its a different world now I'd love to buy again but I can't seem to find anything worth buying everything here in South Florida market is way over priced