First Time Home Buyer / Investor Seeking REOs

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First Time Home Buyer / Investor Seeking REOs

Tony G.
Miami, FL · Member since 2012 · 2 posts · 0 votes

Hey everyone, just stumbled on this site!

A little background info, I just finished law school in Miami, but I'm stuck here for another 2 years until my fiance graduates, with bleak employment prospects. The good news though is I have a bit of cash saved up.

In 3 months our lease expires and market rent in the area are averaging $2200/month. I thought it'd be smart to buy, since I can (at least) break even by the time we move. I'm looking to do a cash offer, absolute ceiling is around $170k (budgeting 10k for closing, title, taxes, etc; another $10-20k for repairs).

I have been shopping REOs primarily (only ones within my price range that aren't completely dilapidated), looking actively for about 2 months. The first 2 properties listed and sold within a day before I could even go take a look, at this time I decided to get a buyer's agent, and managed to put in an offer on a 3rd (which Bank specified 1 week bidding period, BEST and FINAL offer with no counters) and lost, bidding 150k on a 149k asking with 130-150k comparables. I'm now eyeing my 4th (a duplex with great rental potential) and wanting to put in an offer, this time thinking of going 8-10k above asking.

It seems like the reasonably priced ones (near or at market) are closing simultaneously with listing? The average turnaround time to my inquiries from seller's agents (and mine) are around 2-3 days. I have this feeling that there's some insider track I'm not aware of, and most deals are being handed out under the table.

I have cash ready, I have proof of funds. Am I hurting myself by using a buyer's agent? Would the bank REO-brokers be more inclined to look at my offer if they get the entire 5% commission? Are there secret society meetings where REOs are carved up and handed out based on who-you-know?

Any advice?

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y

    You are looking to be an owner occupant, so concentrate on the "first look" opportunities.

    http://www.homepath.com/

    http://www.homesteps.com/

    http://www.hudhomestore.com/

    And get your offer together quickly. If you offer "all cash" as an owner occupant, that might give you an edge over other owner occupants who will be having a financing contingency.

    Your $10K to $20K for repairs may or may not be sufficient; hard to tell until you see what it actually looks like.

    There is almost always an insider track, usually by going with the listing agent directly. But given your experience level that might not be in your best interests.

    The HUD houses will tend to have less involvement from the listing agent, since the offers are all presented online now. You will need an agent who has the proper credentials from HUD.

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  • Tony G.
    OP
    Miami, FL · Member since 2012 · 2 posts · 0 votes
    14y

    I had come across a few first looks, but they are very rare. I guess the limited area I'm looking at has very limited supply. I also didn't think it would be smart to go through my first purchase by myself.

    And yeah, $10k is a low estimate for some of the roof replacements alone, each additional structural damage is another $10k, labor/repairs down here also seem more expensive than elsewhere in the country.

    TY for the links and tips, I'll keep an eye out for more owner-occupant options.

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  • Lynn McGeein
    Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    14y

    Tony, in case you didn't know, you can have homepath homes "coming soon" delivered to your e-mail for specific areas, even before the list prices are on them.

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