offer process
As a newbie to foreclosures, I would like to know more on what to offer on a property. I have noted a property in a good area at $399,000 in foreclosure. What do u think should be my opening offer. Thanks
John, How long has it been on the market? The longer the time usually the more willing the bank is to accept a lower offer.
Is it in foreclosure or has the foreclosure already taken place?
Does an agent have it listed?
Are you working with an agent?
How is your local market doing? Are there a lot of homes that are REOs listed?
Provide us a little more detail and you will get a better answer.
Best of luck!
I'm looking at a foreclosure as well. It's bank-owner, has been on the market for 2 months (previous owned tried to sell it for over 6 months.)
It's in a decent area, and comps that are larger and in better shape have sold for $190K or so. Bank is asking $214K. The house is a mess. We estimate $50 - $70K for renovations with a potential sale price of $160K. Then there are all the carrying/closing costs. It could rent for $1200 renovated. But in this declining market, who knows.
We were considering offering $70K but it's hard to imagine the bank accepting that. My agent checked with the listing agent and there have been no offers. There are plenty of REOs around.
Cash Flow Equation.
Figure out what rent is going for in the area where the real property is located.
Figure out what type of loan payments you will need to meet the your investment initiative.
Don't forget to count in maintenance.
There is actually a formula that one of the other member put up. Keep an eye out for the "Cash Flow" equation. Any readers that are aware of the thread or can just update the information should really through in their two cents.
Best of luck,
Thanks. The rents are between $1000 and $1300 so I estimated $1200.
I'm going to watch it for a while. Lots of REOs sitting on the market now, but the prices are still high.