Bellevue, WA · Member since 2017 · 3 posts · 0 votes
There is a rumor going around my circle. A general contractor is said to have an agreement with a couple local banks where they pay him to bring properties to liveable condition. Roof, mold removal, other safety issues. He is doing about 5-6 projects every month month and a half.
My question is for all the research I have done no body says anything about this being a strategic position for lien holders. Has any body experienced or heard of these types of agreements
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
9y
Banks have paid contractors to bring the properties up to marketable condition before a sale. They generally do this for middle class houses, and they sell the cheaper properties in as-is condition. Unfortunately for us investors, the distress pipeline has been shutting down.
Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
9y
that's not abnormal or that unique but this isn't for lienholders...this tactic is for REO properties that the bank already owns (hence no liens) and the bank has performed an analysis that says it's more profitable (Or less likely to cause loss) to rehab a property than sell as is. I do it all the time for our portfolio if the numbers work out.
Lender · Berkeley, CA · Member since 2017 · 1k+ posts · 549 votes
9y
I know of a private equity firm buying distressed properties in bulk, and then putting in $5-15k if they see easy equity. Then they're sold off by realtors.
My connection is doing this for 20% of his REOs, whenever it's an easy makeover and in a better area.
I'm trying to figure out how to bid on the other 80%, of which half are occupied.