REO Property: Low offers on long sitting houses
I have found a property that is purchase price 73k
Market rent: $800
My offer: 65k
Cash flow $100+ at 12% COC return
3/2 1450 sqft
ready to move in (not turn-key) prior to purchase with no major work needed to be done EXCEPT future flooring due to cheap glue flooring in home.
IT HAS BEEN SITTING FOR 302+ days on MLS!!!!!!!
Should I lower the offer due to the home being on MLS for so long? or stay at 65k?
Are LONG Sitting REO properties motivated to sell for a bank?
LENDERS, BANKERS, LONG TIME INVESTORS, REO agents, and others I need advice
There's definitely a correlation between time on market and seller willingness to accept a lower offer. But I would offer whatever makes sense financially for you from a cash flow standpoint. $100/mo to me seems a bit low, regardless of the coc return.
Originally posted by @Damian Bialonczyk:There's definitely a correlation between time on market and seller willingness to accept a lower offer. But I would offer whatever makes sense financially for you from a cash flow standpoint. $100/mo to me seems a bit low, regardless of the coc return.
Originally posted by @Damian Bialonczyk:There's definitely a correlation between time on market and seller willingness to accept a lower offer. But I would offer whatever makes sense financially for you from a cash flow standpoint. $100/mo to me seems a bit low, regardless of the coc return.
well that was conservative numbers with a 100+ cash return. Also I just heard brandon mention that he saims to get 100+ a door from cash flow and at least 12% COC return so I figured that was an ok thing
@Breelon Bryant
If you have to buy a replacement fridge 3 months in, what happens to your return..
Not to mention the heating or cooling systems failing? A hundred dollars a month isn't enough, unless perhaps you have so many units that they can carry each other.
In my humble opinion
i agree $100 month isnt enough in my opinion unless you have a larger complex that they can cover each other. but every ones market is different. the areas i invest in 100 wouldnt make sense but i also cant find a place for 65k unless its a flip that needs to be gutted. COC is good so if this $100+ a month helps you build more cash for future investment it might be a good deal. will this be a house hack?
@Breelon Bryant A lot of risk with margins of return like this. Like others have said, one unexpected big repair can wipe out years of cash flow. Any idea what the ARV would be after you complete the minor work you outlined? Could it be a BRRRR possibility?
Originally posted by @Robert Beardsley:i agree $100 month isnt enough in my opinion unless you have a larger complex that they can cover each other. but every ones market is different. the areas i invest in 100 wouldnt make sense but i also cant find a place for 65k unless its a flip that needs to be gutted. COC is good so if this $100+ a month helps you build more cash for future investment it might be a good deal. will this be a house hack?
not a house hack. This property has been completely renovated with NEW appliances. Solid foundation and roof so cap ex is great. Honestly there isnt any major issues. The only reason it is like this is because the previous owner got foreclosed on so it needs no repairs for at least 10 years (barring having bad tenants)
Originally posted by @Michael Noto:@Breelon Bryant A lot of risk with margins of return like this. Like others have said, one unexpected big repair can wipe out years of cash flow. Any idea what the ARV would be after you complete the minor work you outlined? Could it be a BRRRR possibility?
See thats the thing. It is really a "turn key" (literally no repairs and rent ready) but the only reason it is available on the market is because the previous owner did not pay the mortgage. I am going to post some pictures
This is the condition of the property right now. Everything is new. Very low future repairs