All Forum Posts by: Matthew B.

I think the main problem in Florida right now is the hype of the recovering market and increasing home values. I believe this is artificially inflated by the activities of hedge funds. There's also a ton of first time investors out buying homes right now and they are willing to pay a higher price just to get in the game.

Just wondering what everyone shoots for as far as ROI or cash flow on their rental properties, with and without financing.

My target properties are 2-3 bedroom SFRs in Central Florida. They're $40,000-$80,000 homes and normally rent anywhere from $650-$900 per month depending on size and location.

Jack, let's hope so! Its tough right now unless you're a hedge fund!

Yes, I'm all cash. Maybe fair to some investors is much higher than everything else is selling for right now. I just don't see how they can justify the high price. As soon as these hedge funds stop their buying I think we'll see the market prices fall a bit.

I definitely don't get attached. They're all just numbers to me. It just amazes me how these real estate agents take it personal when I submit a low offer. And then I see these "investors" buying these properties for an insane amount of money and I wonder if they know something I don't or if they're just jumping into something they don't understand.

Joe - My parents have been rehabbing and flipping properties for about 10 years now. I checked my rehab numbers with them and they agreed they were fairly accurate as far as what I could expect to spend. I do like your idea of submitting a quote from a GC on the rehab cost to justify my offer price. I don't mind paying a fair price for the property.

Anthony - I was considering submitting a lowball offer on every listing she had... but I'm not that mean.

Hello,

This is my first post on this site. I love it!

I've recently been submitting offers on bank-owned properties/REOs that I've found using the MLS. I've noticed that most of these properties are priced extremely high for the amount of repairs they need.

For example, I just put in an offer today on a house that needs approximately $25,000-$30,000 worth of repairs to make it livable. New roof, new kitchen, new bathrooms, air conditioning, etc. It basically needs to be gutted and redone. Now this is a 3 bedroom, 2 bath in an area where these homes are selling for around $55,000-$60,000 when they are in average condition. I mean, a fully remodeled home in a better area on a lake recently sold for $80,000. HSBC has this particular home listed at $59,900.

So today I submitted an offer for $22,500. I figure after $30,000 of rehab it should appraise for about $60,000, and I can rent it for $800-$850 per month. I'd be willing to pay up to $27,000-$29,000 for this house, but I figure $22,500 is a good starting point. The worst that can happen is they counter or say no.

After I submitted the offer, the listing agent calls me, screaming at me that I'm a joke and telling me not to ever sling that kind of mud at her again (her words!). As she was telling me what she thought of me and my real estate license, I clicked send on my second email to her containing an offer on another one of her REO listings. I figured it couldn't get worse.

So, am I out of line here? Anyone else having these types of experiences? I realize banks are usually only going to accept offers at 95-100% of asking price. But what about when I can't find a comparable sold property that justifies their price? Who's doing these BPOs? I would literally lose money if I paid 90% for this house.

Thanks guys!