Bank Owned Homes

stussy5555

stussy5555

HNIC
Dec 12, 2007
821
10
0
I am looking to buy an investment property (foreclosures are at the top of my list). I know many bank owned properties never hit the MLS because banks have deals setup with investors (to give them first crack at buying properties at a much reduced price). Any advice on how to find those types of deals? Just trying to figure out the best way to get a sweet deal.
 


Actually you want to buy investment properties before they become bank owned. Dealing with the bank is a BITCH

The best thing you can do is a get a realtors investor list. Unless you want to do your own marketing/contacting.

Ask away if you have any more Q's
 
They're referred to as REO's with realtors, you're going to usually need some capital to get these properties because they usually have damages and sometimes hard to finance.

In large areas like NYC and parts of California there's a lot of inventory and a lot of great deals that need a little work.

You should network with a bunch of local brokers and tell them that you have CASH to buy REO's, a lot of brokers give stuff like this to their friends but they have to submit all bids to the lender directly. You can find out who the foreclosing lender is and contact them directly to make sure they got your bid.

I used to put signs up in the area that said I buy homes all cash with a prepaid cell number. I got some calls off that and if you do hundreds of signs you will get a response.

Good Luck
 
I'm in the midst of a purchase right now - was looking at foreclosures myself but there's a few hidden things you don't learn until later in your search/offers etc.

Banks will usually NEVER take the first two-three offers, and or will never let the house go in the first week/month they get it. They still try to make back their cost + profit so they often times let the house sit and let a ton of offers come in, then choose the better ones. And yeah usually the homes are not par (though I'm sure you can find gold out there too).

I've done this once before and it worked great though it was mostly fluke - buy brand spanking new from a good builder, live in it for a year (primary res for 365 days and your property becomes capital gains/you don't get taxed on the sale), then list it for a big asking price, live in it until the right buyer comes along. Doing it again this time but with an even bigger home, close to the US border, and while the economy is shite - dealing with agents and offers for homes right now is a walk in the park for me compared to my last time doing this...

Good luck with it OP - put some more thought into how you want to grow/flip that investment (meaning foreclosures vs. new dev - builders are losing their shirts right now).

N.
 
The city of Detroit has the ultimate rebill going on. You can pick up houses here for JUST $1!

Of course, the back taxes are $20k and the damages from all the crack heads that gutted it is another $30k and after all that you're left with a house that's worth about $15k. No wonder they can't even sell them for $1.
 
stussy5555 said:
I am looking to buy an investment property (foreclosures are at the top of my list). I know many bank owned properties never hit the MLS because banks have deals setup with investors (to give them first crack at buying properties at a much reduced price). Any advice on how to find those types of deals? Just trying to figure out the best way to get a sweet deal.
Click to expand...

redfin.com good. Its the most current of all the real estate site. The other sites like trulia have really outdated stuff.
Also get a realtor who knows the area. he'll have access to the mls and is probably desperate to make a deal right now.

And also get ready to be the banks bitch. They sent me a contract saying they could get out of the deal for any reason at anytime. Which is illegal and defeats the purpose of having a contract.

But i got what i wanted in the end
 
This is actually what I do for a living while trying to get my winning campaigns :)

Have owned my own REI company for almost 5 years. I offer turn key investment homes so if you were to do it yourself I could probably give you a few tips.

Its probably best you find a good Realtor that wont mind getting you comps. Then attend a REIA (real estate investors association) meeting for wholesaler contacts, investor educated Realtors, property managers and possibly contractors (if repairs are needed)

You want to figure what area you want to buy in to know if its a good deal. Who cares how you aquire it. Have it be direct from a wholesaler, good deal off the MLS, reo, etc...

Most banks right now are not severely discounting short sales and that is why we "wholetail" direct to end buyers with all of our short sales.

Brief overview is ... after you acquire the property factor in what is the BARE MINIMUM you can do for repairs to make it rent ready. Then factor in gross rent, your PITA (principal interest taxes and insurance) payment and property management fee and you will get your net monthly income.

NEVER neg cash flow with intentions of the property appreciating. Realtors are infamous for this crap. "Oh 2 years it will be work 20-30k more when this market turns around" Mean while you are paying out 2-3-4 hundred a month. Always buy on cash flow not speculation.

Again... shoot me a pm with specific questions or give me a call.
 
check out home(vestors).

also all real estate houses have reo/hud/foreclosure agents that only deal with those kinds of properties.

Another strategy i used is to get on an investors list, the "we buy houeses" guys, yeah well they sell them shits too. tell them what you want 3/2.5 , 5/3, sqft, etc and when they have something in those parameters, they will sell it to you for like a 20-40% mark-up of what they whosale'd it for.

you can usually get a decent crib for well below market value that will need some basic cosmetics. If you have friends and family that are into contracting, then you can rehab the home and gain some great equity without getting in over your head. best part is you will be at market value with homes in the area for a lot less money then it would have cost to just buy it flat out.
 
My question to you is. "Why would you want to buy something that is going to continue going down in value for the next 3-5 years?"

When making an investment, you don't buy on the down swing, you buy at the lower part of an upswing. FYI dude, it is on a down swing like the mutha fricken Titantic. Yet, you want to party on the deck as the ship goes down. That makes no sense to me.

Don't believe Realtors. I was one for some time. Heck, it's always a good time to buy and sell when you as a Realtor.

Renting is better for now and better than being a slave to your mortgage.
 
Don't trust realtors? IZ YOU SERIOUS???

Blastyourass said:
My question to you is. "Why would you want to buy something that is going to continue going down in value for the next 3-5 years?"

When making an investment, you don't buy on the down swing, you buy at the lower part of an upswing. FYI dude, it is on a down swing like the mutha fricken Titantic. Yet, you want to party on the deck as the ship goes down. That makes no sense to me.

Don't believe Realtors. I was one for some time. Heck, it's always a good time to buy and sell when you as a Realtor.

Renting is better for now and better than being a slave to your mortgage.
Click to expand...
 
Gawd, real estate is exploding like Hiroshima in World War II, but you want to go outside and play with bombs. It is a TERRIBLE time to buy real estate. Why buy something at $100,000 when in a year it will be $75k or $50,000? It makes no economic sense. Only idiotic sense would rationalize buying something where you will lose tens of thousands of dollars in a year or two.

Yes, it is a GREAT time to buy for suckers who "buy" into whatever is sold to them by their TV's.

Realtors are just as slimy as car salesman, just a bit cuter.
 
yeah gotta be careful. depending on what happens, entry level homes could be a good bet if you can get them cheap. I'm hoping that the tax credit is extended or increased so we can continue to get borderline creditworthy people into cheaply redone homes. first time home buyers have been all over the tax credit.

check out your county's recorder website. foreclosure notices are posted there as public record. you can generally get the address with little work. make a list and knock on a few doors to try and buy it before the bank forecloses. banks are taking losses depending on your location and the situation.
 
Blastyourass said:
Gawd, real estate is exploding like Hiroshima in World War II, but you want to go outside and play with bombs. It is a TERRIBLE time to buy real estate. Why buy something at $100,000 when in a year it will be $75k or $50,000? It makes no economic sense. Only idiotic sense would rationalize buying something where you will lose tens of thousands of dollars in a year or two.

Yes, it is a GREAT time to buy for suckers who "buy" into whatever is sold to them by their TV's.

Realtors are just as slimy as car salesman, just a bit cuter.
Click to expand...

For being a realtor. you sure dont know shit.
I'm sorry but this is the best time to buy. Material costs more to built a house then it does to buy it foreclosure these days. Most investors are loading up right now. If you know how to shop, the deals are historic. I'm even finding 30-60 day flipping opportunities, thats how low you can buy these days.
 
Damn, looking at some houses in my area and people are listing for almost 100k+ under what they paid.
 
Wow , lots of people who like posting information and don't know a dang thing about the market or properties.


RX7 is right in what he says.............


This is coming from a licensed real estate agent who sells 90% bank owned properties, as well as someone who owns 3 investment properties and a 5 unit apartment complex.

Real estate is VERY LOCAL , some areas still have bubbles, some areas are likely on the lowest possible swing. Many places are selling properties for HALF of building costs from 3 years ago , and there's not a whole lot of room for them to go down.

Partner with a local real estate agent who knows foreclosures, you can find these by going to local brokerages and finding out who sells the most repos. I can help you find who's big in your area and set up an appointment if you want.

Buy GOOD PROPERTIES, all my properties were bought in 06 and 07 during the 'height of the bubble' but guess what? They're not under water and they are MAKING MONEY because I was careful , bought at a steep discount ,ect. The apartment complex I own currently was purchased for $68k (That's a little over $11k per unit) that brings in around $500 per unit per month. If you buy properties that make a return , they're really recession proof unless your local employment skyrockets (Which is the case in Detroit). This can only be overcome by understanding the local employment situation, and hoping/praying you don't have a really bad crash , in that case you're screwed in ways more than the real estate market.

Buy properties that make money , and buy them at a discount, if you do that you'll never have to worry about bubbles , ect. Buy during the height, buy during the worst times, only sell during a boom , so you can go out and get more properties for a discount.

A good property is purchased using a 2% rule, meaning you divide by 2% the total monthly income. 500/mo income / 2% = $25,000. Each market is different, but I can find properties that meet this criteria in any state, however there are some cities that are still too high.

Here's how a good investment plays out, and the profit potential using the 2% method for investing.

Property purchase price (Including total rehab) - $25,000
Property is purchased with a 75% LTV Loan (The property should appraise for anywhere from 30-100% more than you pay for it) the 75% should be based on the purchase price.
So , you end up putting 25% ($6250) down on the property.

The monthly payment on the property will be around $160 (20yr mtg), with an additional $100 going to taxes/insurance and the like.


So , you should clear around $250/mo in income off that property, saving back $50 or so per month in a flexible account for repairs.

$250 a month will repay the initial investment in 23 months excluding repairs, which should be minimal at this time as the property should be in somewhat decent shape.

23 a month repayment would come out to a yearly 48% return on investment, which is just a little bit better than stock *snicker*.

This doesn't include appreciation ,which should be pretty decent, but I won't factor it in due to the potential for a market decline. Also , there are tax benefits with this I won't get into , but they can also outweigh the income in of itself.

Real estate is a wonderful investment, but it takes careful research and knowledge, otherwise you spend more money than you should for the property, and loose your shirt over crackhead tenants because you didn't know what you were doing.


Also , the reason I got in AM in the first place was to monetize my REO blog, which from what I can/could tell , was the #1 most visited REO blog in the world. This isn't saying alot becuase not too many people blog about it , but I managed to get contacts at almost every single bank in the US. Having said this , the costs & time spent trying to chase down direct bank agents isn't worth the hassle and legal headaches. Unless you've got a few million to throw around on purchasing direct tapes, just wait till they're on the market with a agent, and bid. I developed a strategy that usually saves a investor 20% on the purchase of a home compared to a run of the mill buyer. Banks care about 1 thing - money , and all REO asset managers have a calculation they run through a transaction to decide who gets the house.
 
You must log in or register to reply here.
Top Bottom
Back