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To clarify are you saying you want to make an offer on the REO that sold for 60,000? Is this the same property that you describe as having been previously sold for 335,000? I also am a newbie and interested in purchasing an REO. I need to make some financial changes in my life in order to do so. Once I am in the position to move my plan is to shoot low. They can always counter or I can submit another offer. I am in Michigan and I am looking at REO's that in some cases have been listed for 10 to 24 months and pristine properties are getting hammered. My neighbors just sold a beautiful home after being listed 30 mos and a 200,000 price reduction. This house started at well under a million originally. So this price drop was significant. That makes reselling an REO tough. There is an REO near me that is listed for about 250,000 that sold for 570,000 about 3 years ago according to the tax records. Great house. Problems: Big house, will need a lot of paint flooring refinishing $$$$ etc.. Also the property taxes are 10,000 a year. If I already had bigger pockets I might be more of a player. Either way in my market I think you would have to shoot real low to make sure you come out making money. Another odd coincidence is that I've looked at 5 REO's, of which 3 had pools, two of which couldn't have cost less than 30,000. In Michigan a pool is not really an asset, when it comes time to sell, they are often a liability.

It was listed at 475,000. (Twice) I was the high bidder and won at 200,000. The reason I am quite sure the bank owned it is the county records showed a foreclosure and quit claim deeds relinquishing rights to the property to the bank. Plus I had the liber records and the check numbers of property tax payments made by the bank. Could be wrong but it worked out well. Having done this I would like to do it again. My reservations are tied into working with an agent and the fear of wasting their time or overpaying. Based on what I am hearing I must have stumbled into a pretty unusual situation. I may not have success until our market gets worse. I suppose their is no harm in trying to make an offer on other properties and seeing what happens.

I would look long and hard at the location. Also badly neglected homes suffer here especially due to the winter elements. Ice dams, mold etc... Structural damage can eat up rehab funds quickly. Michigan is often described as the one state recession. Foreclosures are booming. More ARM's are about to launch people from their homes. This may actually work to your advantage in the short run. Our local paper reports renting is up over a year ago driven by foreclosures. Good luck.

I tried to send you a private message but am too new without enough posts. I read another one of your posts about REO's I live on the other side of the state and am curious about your success. I would like to try the same near my home. Drop me a line. I would love to learn more. Thanks.

Thanks for any input. The impression I have, based on the posts is that you need to move quickly in many areas. Locally I am finding REO's that have been listed 12 to24 mos pretty easily. There were almost 800 foreclosure filings in August within 45 minutes of where I live. My initial impression is that BPO's are high. I am obviously biased looking at this as an investor. However, topshelf homes are being sold at losses. Real Estate inventory is at record highs. I just don't want to pay too much for an REO + Rehab and sit on it. To do this profitably I need to come to market with a nice property that is competing with great prices and inventory. The only way I see to do this is with offers 50 to 75% BPO. I don't want to be a dink but I dont want to end up a chump either. Is my thinking way off. I've read not to send info about property rehab and market conditions. Send clean offers. Makes sense. Is there anyone sending aggressive offers as a percentage to BPO and finding success. I'm willing to offer and wait reoffer and wait etc...

The auction I went to took place after two seperate REO listings had elapsed. The sherrifs auction had already taken place and the property was deeded back to the bank. I think it was an REO for about 30 mos prior to being auctioned by the bank.

Just joined great site. 1st question: I have seen several references that banks are not allowed to keep investment property/buildings unless they are used in the course of their principle business. Therefore they must sell the property. Is this true of mortgage companies as well? I was turned onto this whole opportunity by chance. I was tring to help a family member buy a foreclosed parcel of land from a bank. Bank could not find records of ownership despite what I provided for them. Lo and behold it went to auction with a private firm repping the bank. Foreclosure was for about 500,000. Opening bid 25,000, auctioneer announced as sold to whomever the high bidder is at 110,000. High bid was 200,000 we won. I realized there may be some opportunities here. Question 2: How long is a lender allowed to hold onto a property before it becomes a regulatory problem and they are truly forced to clear it from the books? Question 3: Would it make more sense to wait and try to pick up REO's at final auction or should I try to make aggressive offers and just stay in touch?