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Buying & Selling Real Estate

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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
41
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156
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REO Property: Low offers on long sitting houses

Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
Posted Mar 26 2020, 15:46

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

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Damian Bialonczyk
  • Investor
  • Marlborough, MA
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Damian Bialonczyk
  • Investor
  • Marlborough, MA
Replied Mar 26 2020, 19:04

@Breelon Bryant

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.

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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
41
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156
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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
Replied Mar 26 2020, 19:06
Originally posted by @Damian Bialonczyk:

@Breelon Bryant

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.

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156
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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
41
Votes |
156
Posts
Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
Replied Mar 26 2020, 19:08
Originally posted by @Damian Bialonczyk:

@Breelon Bryant

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

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Bill O'Donnell
  • Rental Property Investor
  • Newburgh, NY
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Bill O'Donnell
  • Rental Property Investor
  • Newburgh, NY
Replied Mar 26 2020, 19:53

@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

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Replied Mar 26 2020, 20:05

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?

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Michael Noto
  • Real Estate Agent
  • Southington, CT
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Michael Noto
  • Real Estate Agent
  • Southington, CT
Replied Mar 27 2020, 05:46

@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?

  • Real Estate Agent CT (#RES.0799665)

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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
41
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156
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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
Replied Mar 27 2020, 07:48
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)

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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
41
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156
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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
Replied Mar 27 2020, 07:51
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

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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
41
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156
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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
Replied Mar 27 2020, 14:05

User Stats

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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
41
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156
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Breelon Bryant
  • Rental Property Investor
  • Jackson, MS
Replied Mar 27 2020, 14:07

This is the condition of the property right now. Everything is new. Very low future repairs