All Forum Posts by: Vangie Gal

I have been monitoring a property which has been an REO listing for over 140+ days. The bank foreclosed on the property in November 2013. It has been listed by the bank and had a recent price reduction the beginning of April 2014. I'm considering putting an offer but wanted to get the BP Community forum opinions on this subject property.

It is a Fannie Mae asset but has not been approved for any Homepath Financing. The physical layout of the dwelling and the county records do not match.

1. What percentage off the listing price should I consider offering? 15%, 30%, 50%?

2. How motivated is the bank?

3. Since it is a bank owned property, are all liens cleared, what should I be concerned of?

4. Would anyone recommend a particular strategy when making an offer?

5. What types of terms should I include in my offer?

6. Should I contact the REO agent directly or utilize another agent to make contact?

7. Since the county records and the property do not match, how can I utilize this to my advantage?

8. Any other info, recommendations and tips would be greatly appreciated.

As a side note, I personally know the previous owner and have quite a bit of knowledge about the property.

@Azeez K. Interesting scenario. There's a few things to evaluate to help make up your decision. How long have you had the existing financing on the property? Are there any prepayment penalties? What is the current cap rate? What is your loan to value? Will you be taking any cash out or is this rate and term? Depending on your investment needs will help determine the best route for you. There could be some other loan programs available to better suite what you are looking to accomplish.

@Brandon Turner Thank you! Great job on such an extraordinary site! So much information and network opportunities, the possibilities are endless, keep up the great work!

@Chad Ballard Thanks for your assistance! Our family met for Thanksgiving and my brother and cousin are spearheading a lot of the responsibilities regarding the land. We would definitely take up your offer and pick your brain a little bit about the process and your experiences with it. That would be invaluable! There are many options available for us that it can get overwhelming at times, so it helps to hear from members on BP who have these experiences and knowledge. I do have a few questions so I will PM you! Thanks again!

@Chad Ballard Thanks for your input, contrary to public opinion, I definitely don't mind hearing from an engineer and your thoughts.

We are talking to the city planning department, and will meet with them to determine the exact costs and process to accomplish what we are looking to do. We'll also consult with a few local civil engineers to get a better understanding of what needs to happen. These will be our next steps to see if it's worth it to tackle the tasks. Would love to eventually gain more experience as your grandfather and do future development projects as well.

@Mehran K. Thanks you! Yes I'm fortunate to have stumbled upon BP! Such a great place for communicating and learning!

@Will Barnard I appreciate your thoughts! Helps bring things in perspective and how to look at this transaction clearer.

@Will Barnard We received a dull diligence report actually showing HMR R-2 is a more conservative probability for the zone change, but HR R-3 would yield a better return. The risk involved is the potential opposition from surrounding property owners for processing a multi-family project. We spoke to the city planning department and they would support a multi-family project but we would have to see how strong the opposition(if any) is.

We have a few willing buyers who would purchase as is, however I would be disappointed if we sold as is for a considerably lower price then if we invested some time and capital to add value.

@Karen Margrave Thanks for the advice. I'll look into getting some bids with a few civil engineers. The information we received was via the consultants, who are choosing the civil engineers. From my knowledge we haven't talked to the civil engineers directly. This will allow us to ask them about their process. Hopefully a civil engineer can chime in on this subject as well.

@Karen Margrave In regards to the Architectural firm costs I'm assuming for the design plans of the multi-family structures(4-plex etc), but I'm not certain, was hoping to get that answer as well.

Simply put... What would be the most straightforward, most cost efficient way to basically have a zone change and tract tentative map approved? (without actually developing the property)

The unemployment rate is about 8%. Average price per square foot for was $113, an increase of 22.8% compared to the same period last year. The median sales price for homes for Aug 13 to Nov 13 was $190,000 based on 1,607 home sales. Compared to the same period one year ago, the median home sales price increased 18.8%, or $30,000, and the number of home sales decreased 6.6%.

Where the parcel sits is in a newer developed area where the prices of homes are above the city's average.

@Will Barnard Thank you! Glad to be a part of the BP Community. Would like to hear your thoughts on my above posts as I understand you have some experience/background with development in your past. Any information would be most appreciated!