Real Estate News & Current Events
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated almost 16 years ago, 01/08/2009
REO deals by 12/31?
I read an article that quoted an un-named source saying that GE Capital is trying to get as much money by 12/31 as possible-even giving salespeople incentives to talk customers into refinancing to another company or close accounts--in stark contrast to how they've been trained to get people to borrow more in recent years.
Regardless if it's 100% true or not, I'm wondering if banks would be willing to accept less for REOs if an investor can close the deal by the end of the year and the bank can report cash on hand and 1 less REO?
Has anybody seen or heard of banks being more willing to accept lower offers on REO recently? It might be sinking in more as the year end approaches so it's probably in recent offers-not 2-3 month ago offers.
We're running the numbers and looking at making low offers on 3 REOs soon. I'm thinking we'll figure the numbers for our 'normal' low offer (15%-20% less than already lowered price) and then knock it down a couple thousand more to see if they accept with a closing date of 12/29 or so. I'll let you know how our experiences go.
FLFlipper,
I just want to go out of my way to commend you on your style and attitude... Exactly how I want every person in my team to feel and act about investing.
It seems most times when someone is explaining their method behind obtaining REOs they go into great lengths about different calculations in hopes of making something so simple seem harder than what it is... As if they are better than most because of some "formula" they have made.. Blah Blah..
You, my new friend, told it like it is. Bold low offers, Verified denials, And keeping a large number of offers on the table. Sounds like my new REO business plan.
I just made my first offer today on an REO. Tell me what ya think.
Property listed with an asset manager for 68.9K, County Deed Book says it was bought in 2001 for 95K. I Called the asset manager and she informed me that they reduced the price to 65.9k... So I offered cash closing within 2 weeks for 43K. Now im just waiting.
Dustin, Read your post and I had to laugh. I did the precise same thing yesterday. Unfortunately my agent has a wife in the hospital so I had to come up with a plan. On one particular listing I had dealt with this listing agent trying to place an offer. I suppose since the offer was low she told me she never got my email and never got my fax proof of funds and the property was now under contract. (I wish I knew some asset mgrs like you!)
So this time I told her that Countrywide had told me that title passed in October and I needed to contact her to place my offer as she was given this listing. I faxed over my proof of funds, request for a contract and where the deposit check should be sent to, etc. Maybe this time she'll give me the time of day. It should be interesting.
Ingrid
I didn't get a PM from you.
Better have a solid contract by 12/15, that is about the time they close out the year
Hey Dustin
Thaks for your comments, much appreciated :)
As for the offer you put in, you mentioned it sold for 95K on 2001. That's all fine and dandy but was is it worth today? What does it comp at in today's oh so lovely market?
Reduced the price to $65.9K, from what?
I'd be interested to hear it's true value based on 1/2 mile radius, last 6 months sales of comparable properties and all that good stuff.
Thanks again.
Mark
Mark,
Comps in the area within the past 3 months sold at 112k, 119k, and 127k... This one Could Trump these comps with about 10K rehabbed, But really doesn't need it to run par with them.
That reduced price of 65.9 was from the 68.9k price which I was inquiring to the asset manager about.. That's when she told me it was reduced..
Would i be wrong to offer to take this Attractive, Single, Low 30 Y/O asset manager out for dinner :D
Thanks,
Dustin
Dustin, are you certain about your comps?? No disrespect intended and I have no idea about your market. I am just trying to apply current market conditions in the entire Country. Follow me here: The owner foreclosed upon acquired in 2001 at $91K?, lost the premises through foreclosure and the asset manager has listed at $68.9 and just reduced asking price to $65.9. The comps you have are $112-$127K in rehabbed condition and you expect rehab to cost approx. $10K. Is the bank estimating the rehab cost much higher? Prices have declined in general all over and I'm assuming your asset manager obtained a BPO prior to setting the list at $68.9. Now she is reducing the price to $65.9. This tells me your comps might be off. Have you seen the property and seen the comps you are comparing to and do they compare apples to apples?
Yes I have checked out the property, And yes it does need some work.. Good thing Im a contractor.. But the issue here is that the asset manager lives a good 60 miles away, over the phone she was insistent that it needed a TON of work.. Floors, Drywall repair, Paint and the rest of the basics aren't a ton as far as im concerned, the foundation and brick show no signs of weakness.
These comps where all sold competitively with few days on the market.. The property doesn't even have a for sale sign on it or a contact number.. I know the person who sold it in 2001, and said that it was bought Cash in hand... So im assuming the buyer Used a HELOC they couldn't pay on.
All this talk of the 2001 price etc. needs to go away. Forget it! It has zero relevance right now.
I can't comment on your comps too much so I have presume you're a good boy and you've done all your homework.
Let's use the lowest comp of $112K
Based on that then MY offer (this is only me now) would be $56K tops!
You only have a $10k rehab (and yes you do need to spend that and maybe more to make this property stand out from the crowd) then you should be right on the money (ish)
As for the taking her out to dinner, if she's really in a position to help you I'd take her to bed too :)
(sorry, was that a little crude for here?)
And is she really an actual asset manager? She works directly for the bank?
Hey Dustin, if she's a real asset manager, maybe you can get her to share the love.......and hook us up with her Osceola/Orange County FL contacts!!!
Im seeing Gobs of stuff down there on the Countrywide database... Jesus I need to relocate :)
Mike,
I was going to leave that portion unspoken :p
Dustin
Most good deals generally come at the end of the year.
I'm starting to hear a lot of rumblings from our local real estate commission (Colorado) about double closes.
I'm not talking about the usual ignorant speak that double closings are "illegal' but rather a determined movement to stop them. The real esate commission is putting pressure on brokers to not participate in double closes without full disclosure of the source of funding.
We're down to just two title companies that will handle a double close. Both title companies require full disclosure as to the source of funds or flash cash to fund the first leg of the deal. The good news is that a bunch of flash cash private lenders have entered the market and will supply funds at less than a point for up to 5 days.
Originally posted by Jeff Tumbarello:
I just spoke with an asset manager. They will be playing ball till 12/28...
good luck and good hunting
Bob, can you update us - did the offers go through?
Pls be advised it SOUNDS easy, but let me tell you in my world it has been, but you best have your buyer and some money from them before you go out and make an offer that gets accepted.
I would advise you to work with others first and get the system down pact. Many tell you that they will buy from you and then when you get the deal they get cold feet.
As for Bob I still think that you are too high on the offer to the bank. What are you afraid of? See what it sounds and looks like to me that many are in love with these properties and are afraid of rejection. I would go in and offer them $20k CASH. I guarantee that they will comeback somewhere in the twenties or low thirties so you did not even try to go low and that is what I see everyday from investors. It is your money why not protect it. They are trying to sell you something so you have the CONTROL.
I just closed with Barclays on 12/31. Offer was made 11/28, verbal acceptance 12/8, written acceptance 12/15 and closing on 12/31. Very smooth sailing for me.
An update on the deal I mentioned earlier. It dropped to $44k on a Friday and we faxed in our offer Monday morning, Monday afternoon it was taken off the market. A few days later, it came back on the market (MLS) as pending, and closed at $44k. So it went as a sweetheart deal to somebody.