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This is a good question, and I would be interested to hear what people have to say. I travel constantly for work and am trying to think of a creative way to leverage that lifestyle to seek good deals across the US. I am working in Denver right now, but have not had much of a chance to explore the RE market here.

Do you all bring in contractors for estimates before or after you purchase the property? I have an idea of how much the repairs will cost for a property I am considering, but I am debating whether I should try to get some real estimates before I put in a bid.

Casey

Everyone seems to agree that now is as good as any time to flip, but what about financing the deal? I have found that there are very few recent comps near the rehab property that I am looking at. This makes me think that it might be hard to get a conventional loan. Any thoughts regarding this (potential) impact on rehabbing?

Casey

What usually causes this delay in hearing back from the bank? Is it that the bank has a bunch of offers for various properties to deal with, or are they just sweating out the bidder, hoping that they will get antsy and come back with a higher bid?

My rough timeline is to try and put a bid on this property in a few weeks. It has been sitting for a while, so fortunately I do not feel so rushed. I am waiting to look at the inspection report, then I will be able to get the ball rolling.

I am kind of jumping ahead here, but how do much effort do you put into the rehab plan? Do you focus on the big projects first (i.e. kitchen) or prefer to cover the easier tasks right away, such as painting the bedroom?

I will be pretty short on cash to fund this project, but I think that with a conventional loan, possibly a HELOC or HML for the rehab, and surplus from each paycheck I can make it work. Thanks for all the input.

Casey

Thank you all for the warm welcome. I must say that I am very surprised to have found such a supportive and informative real estate forum. You have all created a very effective online community!

I will hopefully be moving to California soon because my wife is currently in the process of applying to medical school, and she would like to go to school in CA. We are both from the SF Bay Area. I know that the real estate market is brutal out there, that is why I would like to get some experience now.

If anyone has experience rehabbing REO property without a lot of cash on hand, please send me a message. I would love to pepper you with a few questions!

Casey

Hi Folks,

I am about a year out of school and am finally fed up with just looking and reading about real estate. Thus far I have been hesitant to buy here in Northern Virginia because I will probably only be here for another year. At this point I am looking to take on a rehab project, but only if the right deal presents itself. Looking at REOs and distressed (but not too distressed) properties in the area.

Will hopefully be moving to CA in a year, but it would be nice to get a deal under my belt before then. I look forward to learning from you all!

Casey

Thanks, Jon. I do plan on rehabbing the house but I will not be so hard pressed to make a quick sale. I will probably go after a conventional loan, the place is not so bad that the appraiser would consider it un-livable. Right now my wife and I are moving from a modest 1 bedroom rental to an even cheaper living arrangement so we can increase savings. This scenario should allow us to move into the rehab house after the serious renovations are complete, that being the kitchen mainly. Thus the monthly out-of-pocket debt service is not such a hard hit since we can hopefully get some utility out of that money (i.e. living space).

I definitely also understand the point not to fix up the place as if we would be living in it long term, but rather to make it a marketable property.

Need to catch some shut-eye, but thanks for your post. I will have to take a closer look at the expected costs and ARV. When I do come up with a price that I can afford to pay, should I underbid that number a bit expecting the bank to counteroffer? Or should I just put the number out there and hope for the best?

Casey

Hello,

First poster here. I have been studying up on real estate investing for some time now, and I finally am getting serious about taking the plunge. I live in northern Virginia and am interested in purchasing a REO. I am about to go through the process of getting bank pre-approval, bringing in a contractor to give me some estimates (only plan on using contractors for the big jobs), and planning out the finances to ensure I can make it all work.

My biggest question is regarding how I should go about making my initial offer to the bank. They are asking in the mid-200s for a place that, if fixed up, could go for almost 300k. Probably would take 30-40k to really fix it up. It has been a REO for nearly 6 months, and my understanding from the listing agent is that the bank is flexible on price. So how low should I go? I know that it is not a straightforward answer, but any advice would be much appreciated.

Thanks in advance. This looks like a great forum, I look forward to learning from you all.

Casey