Buying REO Property

[Dustin Johns]

Have you guys been buying many REO's lately. Unless we are buying a large package, it has been difficult for us to get an offer accepted that we can make money on. If a REO is listed at $100,000, what is your typical bid range?

We try to purchase in the 55-65% range. Any feedback is greatly appreciated.....

[Jon Holdman]

I think you will have a difficult time buying REOs at 50% of their listed value unless they have been lingering unsold for many, many months. The listed price might be retail, retail less repairs, or a nice discount. Doesn't matter. Its what the bank wants, and they're not going to come off that price very much unless they've had it on their books for a long time.

So, the trick is to catch ones that have a price drop that moves them from too high a price to a good price. Unfortunately, you're not the only one doing that, and you'll have plenty of competition.