I need advise on a deal or deals

[colken32]

Ok here is the deal i found a bank owned property listed for $16,000 in my town it is 1.52 acres actually it is two lots it has one house on each lot one of the houses needs burning and the other can be fixed but not sure how much probally somewhere around 15,000. Ok i made an offer today to the real estate agen who had it listed for $8,000 she called me back and wanted me to put in writing with a $1,000 check escrow check and apre approval letter from my bank I have done been offered $20,000 but also got wind that the habitat for humanity was looking for three lots to build on and this property is big enough to build 3 maybe 4 houses on so i called them today they are interested i think with the comps i looked at which i am appraiser i can get $8,000 x 3 if they build three which would be 24,000. But should i see what it will cost to rehab the house and resale it with the lot it is on i think it would go for at least 35,000 and sale the other lot for 8,000. Really dont know what to. I do know in 2002 this property sold for 45,000. What should i do? With the bank saying i need the offer in writing and wanting me to send a escrow check does that mean they have accepted my offer. Can't ya make just a verbal offer?

[brianb_cobbres]

I am only going to try and answer one small part of your question.

No, you cannot just make a verbal offer, it has to be in writing and I would try and talk them into smaller deposit.

[Dan Auito]

I would lock it down with $500 in earnest money. You have a few potential exit strategies so getting control before someone else does is your first step! Put a contingency in like "Contingent upon buyers approval of satisfactory inspection within 10 days". This will give you time, to do some research and thinking before someone else has the chance to snatch it up! Write the check!

[Tom Henderson]

Not sure of the details, but if it is a good deal no matter what exit strategy you decide, you would do well to put it under contract now. Where I am in Dallas, Tx, you can usually forget about changing the bank's policy on selling their REOs, unless it has been on the market for 90 days or so. Also, just because the bank says put it in writing, does not mean they have accepted your offer. I will wager the bank will counter.

You might try submitting an offer with less escrow money, but I doubt they will entertain the offer as being serious.

I want to repeat...If it is a good deal, move on it quickly. There is a saying that "YOU DO NOT STEAL IN SLOW MOTION". :SM001: This has a lot of merit.

Hope this helps.

Tom Henderson
H&P Capital Investments LLC
214.575.8292
1.800.481.6588
www.hpnotes.com

[colken32]

The contingency you was talking about just tell them i want it and try and get them lower on the escrow account? I would like to try and lock it up so noone else could get it until had a better chance to investigate but i cant see any way i could go wrong with this i know i can make some money bu what do i know i am a rookie:)

[colken32]

Should i put a financing contingency on this contract and say contingent upon the buyer getting the financing? Is this smart with a bank owned property?

[Dan Auito]

Usually the finance contingency is a standard line item on most real estate sales contracts, look over the contract you will be using to see if it is addressed, I'm sure it is there. Don't make that an issue just know that the inspection is your way out if this thing starts going south! :thumbsup:

[colken32]

I was reading an article it said that a inspection contingency on abank owned property is not good, said they wouldnt take it as serious. It was saying that the is a weasal clause to them. So waht say you good folks?

[colken32]

Ok i just read over the contract in the section about the inspection this is a area they want me to initial it sayes that by signing the buyer agrees to take the property as is then it has the next section where i assume if i want to put the contingency i should so please help will this run them off if i ask for the inspectin contingecy?

[reinvestor_1024]

If you are planning on buying the property... you need to plan on having it inspected. If that runs them off...then chances are theres something wrong that you need to be concerned about.

[Dan Auito]

You might explain to them that you will only need 5 days as opposed to 10 to ensure there are no hazardous materials, or other major problems. Now sign the contract and gitter-done before it's gone! :SM140:

[colken32]

I was ondering why have a financing contingency if they request a pre-approval letter if they pre approve me which they have that would not help me to get out of the deal right? just curious. Also we was thinking about getting the loan on a 6 month note is that the best way all we will be out would be the interest after six months no monthly payments? I really appreaciate you all helping me on this . Even though i am a nervous wreck. :smiley11:

[Dan Auito]

I was ondering why have a financing contingency if they request a pre-approval letter if they pre approve me which they have that would not help me to get out of the deal right? just curious. Also we was thinking about getting the loan on a 6 month note is that the best way all we will be out would be the interest after six months no monthly payments? I really appreaciate you all helping me on this . Even though i am a nervous wreck. :smiley11:

Forget about the financing contingency if they have already approved you. Try Ten years with no early payoff IE...pre-payment penalties, that way you won't be forced to sell when a six month note comes due! You can always pay it off sooner but if it is due in six months you'll have to pay it off by that date. Give yourself time!

Is this loan just a balloon with no payments due until the six month deadline? I don't know your financial situation but this should be a very low cost loan payment.

[colken32]

No this is just a note interest due only after 6 months and they will renew or extend for however long i want.

[colken32]

Ok here is the update on my deal i was asking about in this thread. I made the offer for $8,000 the agent called me today and said the bank countered with $10,000 i called him and offered $9,000 and they accepted now i got 1.52 acres and two houses one needs bull dozing but the other is a fixer upper. Now i ha d one offer of $20,000 and i am suppose to put a price on paper for the housing authority to review on thursday thye are needing lots to build habitat for humanity homes on and you can get 4 houses on this land i own now so i am thinking i will price it either for $28,000 or $30,000 they bought two lots in a equal to or less than neighborhood and gave $9,400 a piece. So i will let you all know what happens. I am pondering maybe rehabbing the house and selling it and the tract for around $35,000 and then selling the other lot seperate for about 7,500. Just dont know this is my first deal so i migt just get rid of it quick. Think i did pretty good on my first one. :smiley21:

[Dan Auito]

See if you can get a good price and sell the whole enchilada, you'll need those funds to do the repairs on the next one. Start building the kitty and getting used to finding the deals. As you can see here, you'll probably clear $15,000 without picking up a hammer!