Find a Bank REO!

[PieThief]

We are getting ready to close on our first SFR which was a HUD home (not a REO). But I wonder if some banks might operate with a similar formula so I thought I'd post it anyway.

I do know that on HUD homes, HUD will accept 87.5% of the asking price as their NET in the deal. I had heard this amount from multiple people who deal with HUD homes so when we found a HUD home we liked nearby, we made an offer for 87.5% and it was accepted:

ASK: $50000
OFFER: $43750 (87.5% of ask) + $1312.50 (commission for my agent who found the house) + $1300 extra* = $46362.50

* We wrote into the contract that HUD will pay $1300 of our closing costs (hence the extra $1300). As long as their NET meets the minimum they take it. So we got to finance $1300 in closing costs for what, a few bucks a month?

I also was told (but have not tested this out yet) that once the house has been on the market a while and they've dropped the price, the 'formula' gets more complicated, but I'm not sure if that's true or not.

Marc

 

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[Bilgefisher]

Very good advice. I guess you can't learn to swim without getting your feet wet.

 

[Bilgefisher]

Question when making an offer:


When you make an offer to purchase an REO to the bank, do you talk directly to the bank or go through the agent listed on the lender websites?

I ask because I am getting ready to purchase my first personal home and am strongly considering the REO option. I would rather avoid the RE agent since they aren't how I found out about the property and merely serve as a money draining middle man. (In this case)

 

[Runum]

I have attempted to buy several REO's and have been successful with one. All offers were made through an agent. I think that the bank contracts with a RE agent to advertise their REO's that don't get sold at auction. Good luck.:cheers:

 

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[andviv]

bump...

During the last meetup there was a presentation from a REI who buys from banks, fix and flips them under FHA (sounds like a familiar model, isn't it?).

A big part of the process is to buy right (we all know that, correct?) so he keeps buying exclusively from banks. For those using a similar model, this thread is very valuable.

 

[MJ DeMarco]

bump...

During the last meetup there was a presentation from a REI who buys from banks, fix and flips them under FHA (sounds like a familiar model, isn't it?).

A big part of the process is to buy right (we all know that, correct?) so he keeps buying exclusively from banks. For those using a similar model, this thread is very valuable.

Did he mention which banks he prefers? Which are dealing? Which are not? Which are pains to deal with?

 

[andviv]

Did he mention which banks he prefers? Which are dealing? Which are not? Which are pains to deal with?

can't recall... will have to watch the video again to see what he said... but I don't recall if we asked him that. Imran, any clues?

 

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[andviv]

oh, and by the way... my people in FL told me this morning that Wachovia and Chase were easy to work with these days... that BoA was getting better... and that WaMu was a pain in the you-know-what.

 

[hakrjak]

Just had a positive experience with Wells Fargo in November.... I hate dealing with Countrywide -- in general, they are just idiots, but their REO department is staffed with especially low IQ monkeys. Like J said, in most cases it's all about who you get assigned to work with on any given deal.

- Hakrjak

 

[andviv]

OK, the please disregard my post. I rather allow people with first hand experience comment about this one.

 

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[Caesar Leo]

Countrywide wouldn't give me the time of day...I think I offered about 65% ARV... About 10-13% was for repairs and a 2% cushion...But other investors have told me that they are difficult to work with thoo.

 

[venom]

We played the #'s game.
Many offers and a few acceptances. Dont listen to what the realtors tell you . They always say they will never accept ammount and yet they do
I agree with who cares what the bank is point of view. I Decide what I want to spend on the house and then they can accept it or we can move on.