Looking to put a offer in on a Fannie Mae / REO property.This 4plex has one accoupied unit,is in need of some cosmetics repair possibly more, asking price 379,000 would like to get it at 70% of asking price any suggestions on what should my first offer be.
Run the numbers for the property and make sure it works for what you plan on doing. Go up to the blue bar under "analyze" - "rental property calculator" and plan out what you need in terms of cash flow. From there you can work what your maximum offer can be and don't go over it.
I ran the numbers like you said Kyle using several different scenarios, like 3% Fannie Mae and 5% 203K loan. Using conservative numbers to get the cashflow i wanted. Now I have a definite idea of what my maximum offer should be and also my starting offer. Thanks Kyle for the input it really helped me out .
Be careful just aiming for 70% of market value, you might lose the house because your being unrealistically low, or you might get it because it was so overpriced to begin with!. You are better off looking for comps and arriving at your price that way. Right now foreclosures are overpricing themselves in my market. So it is important to know the value so you get a great deal.
- Exactly what I'm worried about giving to much of a lowball offer that I might lose the deal . The numbers show that a purchase for 350,000 would net me a about $120 per unit .But with rehabbing costing around 6 to 7 thousand per unit ,and a 203k my purchase price needs to be around 320 -325. Thanks Elizabeth Colegrove I've read several of your Blogs and replys to other BP members it's nice to get your input.
@Kelvin Schaeffer I am in the process completing an offer for a fannie mae property. It's a great big 30 - 35 page AS IS offer with REPA. I can't seem to find in the contract if the property is delivered to the buyer free of any liens or building code violations. Do you if the fannie mae properties are sold free of any building code violations or liens?
Free of liens, yes. Building code violations will generally have to be dealt with by the buyer.
@Wayne Brooks Thanks so much!
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