1st offer on REO property

[Arthur J. Encinas]

Hello everyone and thank you in advance for your answers and insight.

I'm looking at a SFR REO property-3/1, 994 sq ft, 9600 lot size. NOD deed was for $98k. It was on market for $70k and now down to $62k. Comps are from $80k-135k (wide range). I havent seen the property or know what rehab would be as Im out of town. ARV would be at about $110-120k.

My question is the following:

I'm thinking of offering $50-55k but I want to make sure it's an attractive offer to the lender. Besides asking for number of offers on property and what damage if any does the house have, what other questions should i be asking. (home has been on MLS for over 60 days.

Also what terms, wording, clauses should I put for example inspection days 7,10,14 days, earnest money, inspections, pay for repairs, split CC, etc.. I'm still looking for an investor either HM or private for 100% financing and avoiding paralysis by analysis so what do put an offer in the next couple of days as this has been on the market for over 60 days.

I'm a real estate agent as well, should i have my co-worker put the offer for me or should i have the listing agent do so, and what is the benefit of doing the latter as I read that it's more practicle. 

My exit strategy is to fix and flip and my 2nd E.S would be to rent it out, prevailing rents are about $800-900.

What are your thoughts, advice?

Thank you all.

[Greg Scott]

Arthur:

As you know, one downside of the MLS is that the best deals should already have been picked over by local investors. On the plus side, you can usually get an inspection period which is the critical piece of the puzzle here.

Many REOs have a formula for pricing and accepting offers.   (e.g. lower the price 5% every two weeks, only take offers within 10% of asking)   I would throw out an offer you think will get accepted with contingency on inspection.  Then get a reputable contractor, hopefully one you already have a working relationship with, to give you a quote to make the place perfect.   That is when you really run your numbers.

If the deal doesn't box, then make a counter-offer at a lower price and explain why.  You don't want a reputation as a low-baller, especially among your Realtor brethren.    If the numbers don't work, just walk away, but keep an eye out for later price drops.  If the numbers don't work for you, they probably don't work for most investors.