BiggerPockets

Recently purchased Reo Rockstar and they suggest providing a PoF from hard money lenders etc. Most of the REO's on our MLS says CASH ONLY. Does that mean that if I make a offer with a POF from a Hard Money lender that they won't look at it? Or, does this mean the same thing as Cash Only? Thanks

And some banks will want to see real POF's meaning a bank statement with CASH in the bank.
Approval letters do not always work, but often do. As Brian stated, a large part of the key is no financing contigency and thus, if your HM lender does not approve your loan, you lose yoru EMD!

I agree with all of the responses... Basically the banks are req. cash only because they want the property sell quickly without all of the lender delays and then to have the sale fall thru due to financing issues on the buyer's end. And yes, many are now requiring a bank statement that shows funds are in hand...

If they are that strict about the offers being all cash with no contingencies whatsoever, are you still allowed to ask for a 30 day (or so) inspection period? Or is it up to you to get your contractor in there to estimate repairs, and get a CMA/find-comps BEFORE you make any offer?

Originally posted by Stephani

You can ask for a 30 day inspection period, but it will weaken your offer quite a bit.

There is a lot of competition right now for REOs, so you want to make your offer as clean as possible. If you must use an inspection period, try to keep it short and sweet.

Steph

Isnt that the truth! The more stips and contingencies you request, the further to the bottom of the list your offer goes.

Carson,
50% of teh dollar does not happen to often here in CA, however, to answer your question, if you do it right, then you get in BEFORE it hits the MLS and know your repair budget going in.
You are correct that once it hits MLS, it is offer, offer, offer, accept, sold!.

I don't bring a contractor with me to every deal I look at. You think my contarctor wnats to waste time doing a ton of quotes on properties I don't even have under contract? No way! I estimate the repairs (experience has taught me how) and once I have it under contract, I use my very short inspection period to bring in my contractor to verify the repair estimates and give me a hard bid in writing.

Here in Houston all the deals I see as CASH ONLY are trashed. When you put a offer in here you automatically without putting any stipulations on the contract get 4 days to back out for any reason. You should be able to guess what the repairs should be..................then add 20%

Chris

I take about 5 minutes to walk a house before putting an offer in. With a little practice you find yourself simply adding as you walk. It sounds something like this:
"5k for kitchen upgrade, 2,500 for bathrooms, 1,500 for missing condenser, needs flooring that's 2,500 and 2,500 for paint in the entire house, so around 15k rehab." Lock up and then on to the next house. A friend of mine does reverse math. He assumes the house needs to be gutted to the studs and starts at 40k. He then subtracts from there for anything that is salvageable until he arrives at a fix-it budget.
After you get an acceptance on your offer I go back with a check list and spend around an hour making sure I can really do it within my allotted budget based on my ARV. Because of the type of crap houses I buy, that same day or the next day I have my septic guy and termite guy come to give me the good or bad news. Then I head to building and safety to talk to code enforcement about the code violations they have and what they want me to do. When I am satisfied there are no major surprises I wire the entire purchase price to escrow as my earnest money. Like Chris said, you can write an offer saying you have NO contingencies or inspections, but you always get 3 or 4 days which is plenty to see if you need to back out based on surprises you might not have noticed. It would be during this time you have your contractor come take a look with you, not before acceptance of the offer.

cash means cash. use a bank statement, IRA or brokerage statement if you can, you are not showing where the $$ is coming from, just showing you can close. it would suck to miss a good deal on a technicality like if they don't like your POf letter for whatever reason...

as for competition, the ones that are priced right are gone in under a week here, I had several I missed before I could even get in to look. when I was fast enough, ONCE, I put in no contingincies, all cash, 10% earnest, offered substantially over list and still got beat out. The guy that got it paid 7k more than my offer and probably still made 40. That makes him smart and me cheap I guess, lol.

you need speed, money, and know what your doing for those. it probably doesn't hurt to have an inside track or to be lucky either.

the ones that are priced wrong at 2x their trashed current value will sit there for months, you have to watch for the price drops and be ready to move when the market reality and the list price get relatively close. for some reason I've been able to make those work pretty well but it's a waiting game.