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View Full Version : REO Property in Good Condition - What to offer?


GoodLife
04-11-2008, 01:07 AM
I'm just trying to get started with REI. I purchased Jim's Subject To course and I'm working on that. I'm reading some other books, but I'm serious about getting to the point of making an offer to get started.

In this process I have made a few trips with a real estate agent (also a friend). I'm doing that to get an idea of what is currently listed, prices, condition, etc, so that I will have something to compare it too when I try to get my own leads.

We looked at several of the lower end housing rental units that are for sale. The owner isn't that motivated, but he certainly looks like a slum lord after seeing the condition of a few of the properties he has for sale. He is renting to illegals and is doing zero maintenance on one of the houses we saw.

Today I went to an REO that appears to need very little by way of fix up or rehab. There are a few minor issues, some flooring damage in the kitchen where a fridge/ice maker probably leaked over time, an apparent stove fire with some scorched cabinets around the stove.

The REO is 2 bedroom 2 bath, A frame style, with a half acre. It is in a very nice neighborhood where there has been some new construction, lots of remodeling, and mostly larger homes.

It is listed at:

$83,500

Property Features
* Single Family Property
* Status: Active
* Subdivision: Bush
* Year Built: 1985
* Age: 23 year(s) old
* 2 total bedroom(s)
* 2 total bath(s)
* 2 total full bath(s)
* 5 total rooms
* 1 car garage
* Central air conditioning
* Interior features: Carpet, Tile flrs
* Exterior features: Deck, Lot is between 1/2 and 1 acre, Public sewer srvc, Public water supply
* Approximately 0.5 acre(s)
* Lot size is between 1/2 and 1 acre

I have asked my friend to get the appraisal value, taxes, and how long on the market. I will also inquire as to rental prices in that area.

About the only serious issue looked like replacing an older AC unit.

If a house is in such good condition, and it really is pretty solid, how would you proceed with an offer?

Thanks for any thoughts and ideas.

brianb_cobbres
04-11-2008, 01:53 AM
What you plan on doing with it, whats your exit strategy?

GoodLife
04-11-2008, 09:22 PM
I'm planning to buy and rent, at least initially. I need to determine how much I can actually borrow and repay based on the rents I hope to collect.

See below for a 3 bedroom 2 bath in the same neighborhood, maybe about 100 yards from the home I'm looking at. It is new construction. It is listed at 180,000.

I know you need to do comps of the same type of properties in the same area, but how would this affect the price of the house I have mentioned (the 2bed/2ba) for 83,000?

The tax appraisal value is 66,530 (in that the land is valued at 15,900).

I would really appreciate some insight on how you more experienced investors would look at this.

Thanks.
Ray
**

List Price: $180,000
Street #: 1214
Address: KAREN
Bedrooms: 3
Full Baths: 2
Half Baths: 0
Type/Style: Traditional
Subdivision: WALKER S/D
City: LAUREL
Area: Laurel City
Elementary School: MASON
Middle School: JONES

High School: LAUREL
Lot Size: 110 X 131
Apx SqFt: 1817
Apx Year Built: 2008
Exterior Finish: Brick Veneer
Foundation: Slab
Heating System: Central Electric
Air Conditioning: Central Electric
Water/Sewer: Public Water, Sewer Connection
Garage/Carport: Double Attached Garage
Fence: None
Interior Features: Hardwood Floors
Exterior Features: None