REO Offers Accepted

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REO Offers Accepted

Wes S.
Developer · Cedar Rapids, IA · Member since 2009 · 97 posts · 42 votes

Please list your REO situation: Who the Bank was, list price, the offers you submitted, any counters and finally the acceptance price.

My goal is to give all of our BP friends a leg up in approaching their next REO deal. As we all know, it all comes down to the numbers at the end of the day.

****I know these prices and properties are dependent upon condition, DOM, ect.... We get all that so please keep it short & sweet...just want the facts.

Thanks. :D

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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
Originally posted by Jerry West:
Waited three weeks and submitted same offer again. The bank came back with 58,900 with 2500 earnest. I rejected the offer. They came back and said they had accepted mine!! Looks like patience was the key this time!
Jerry, good job on sticking to your guns on price (assumming that was the best you should offer). For future reference, when you got that counter offer and the bank wanted a higher price AND double the EMD you offered, then you countered back with the $2.5k EMD but same price as before, you may be better served in the future by going up $500 and offering 5 times or more for the EMD. This does 2 things for you. 1. It tells the bank that your first offer price was your highest offer but then tosses in a small additional amount giving them the "perception" that they won a small battle and 2. the large increase of EMD over what they ask often will bring their focus onto that item rather than the price point and again, give them the "perception" that they won another battle. It also shows them you are a serious buyer who will not back out as you placed a lot more in EMD than was requested. This can often be the difference between accepted offers and those that are rejected or re-countered.
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  • Wes S.
    OP
    Developer · Cedar Rapids, IA · Member since 2009 · 97 posts · 42 votes
    16y

    I'll kick it off:

    Property 1:
    - HUD Home
    - List Price: $101,000
    - 1st Offer: $87,000
    - 2nd & Accepted Offer: $91,000
    - DOM: 25 Days
    - Sold last fall for $125,000 after $8k in upgrades.

    Property 2:
    - Citimortgage REO (Dec '09)
    - List Price: $35,000
    - 1st Offer: $31,000
    - 2nd & Accepted Offer: $36,500 (I know...I got caught up in my 1st "Highest & Best" Bulls**t & learned a lesson. Overpaid but worth it IMO in my little market here. Just appraised for $91k after $8k Remodel.
    - 10 Days on Market

    1Reply
  • Account Closed
    Real Estate Investor · Springfield, MO · Member since 2009 · 20 posts · 1 vote
    16y

    Wes -

    Your HUD property is WAY off from the (ARV x .70) - repairs = offer price equation. Looks like you should have pain no more than 80K for it based on the equation pushed by so many of the experts here on BP.

    Just curious, how much did you profit after all the holding costs, closing costs, realtor commissions, etc...?

    0Reply
  • Wes S.
    OP
    Developer · Cedar Rapids, IA · Member since 2009 · 97 posts · 42 votes
    16y

    Jeff,
    It is off b/c it was my first deal and first home a while back. Sold without a Realtor...in the end, it worked well for me and walked away with good $.

    NOW, Back on Topic. Get your deals on here... :) No Armchair Investors. :)

    0Reply
  • Tom C
    Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
    16y

    Are looking for current deals or deals period? The 3 that I have done are over 1.5 yrs old and the market has changed a lot since then.

    0Reply
  • Wes S.
    OP
    Developer · Cedar Rapids, IA · Member since 2009 · 97 posts · 42 votes
    16y

    Tom:
    All deals, let us know the year it was if you want. I know there are a lot of variables to these deals but I just want to see what the final #'s are.

    I've followed and tracked alot of HUD homes, in different markets and see the acceptance price is ~ 85% of Listing Price.

    0Reply
  • Tony Salazar
    Rehabber · Corona, CA · Member since 2009 · 59 posts · 21 votes
    16y

    Ok Wes, Here you go:

    Purchased on 2/1/2010 from Aurora Loan Services for 125,000
    List price was 119,000
    Riverside, Ca.
    Small 4/2
    Rehab 15K
    I Listed at 175,000
    Sold for 187,500 and closed on 03/17/2010 to all cash buyer

    46 days in project from start to finish from rehabing, listing, and escrow. I am grateful!

    PS: I am looking for another REO to purchase, must be in the Inland Empire.

    3Reply
  • Tom C
    Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
    16y

    First

    HUD

    List $28K
    Offer $24K
    Accept 07
    $8K in rehab
    Appraised 2 months later for $64K
    Holding as rental $550 per month

    Second

    Northwest REO
    List $27K
    Offer $16K
    Accept 07
    $3,500 in Rehab
    Appraised 2 months later for $58K
    Hold for rental $625 per month

    Third

    Fannie REO
    List $24K
    Offer $12K
    Countered $14K
    Accept 08
    $3,500 in Rehab
    Appraised 1 yr later.. Got F'd due to new appraisal rules.. Appraised for $38K
    Hold as rental $550 per month

    Pics can be seen at my profile

    2Reply
  • Wes S.
    OP
    Developer · Cedar Rapids, IA · Member since 2009 · 97 posts · 42 votes
    16y

    Tony: Way to Go! Nice numbers...Good Dough for 46 Days!

    Tom: Those are some good purchases comparitive to rental income...Interesting to see that average entry price is ~ 66% of List.

    Good margin of Safety (s)...

    0Reply
  • Wes S.
    OP
    Developer · Cedar Rapids, IA · Member since 2009 · 97 posts · 42 votes
    16y

    Current Deal - Play by Play:

    Fannie Mae REO- 4 Bed/1 Bath, good location, needs TLC though...probably $5k - $7k in rehab. Original List was $59,900.

    Sat for 30 Days, just reduced to $49,900.

    I Offered $25k with no contigencies, $2,500 in Earnest Money and close by month end. FM countered at $47,500....I countered at $27k and waiting to for their reply.

    1Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    16y

    04/2009 Deutsche Bank
    4 family
    Listed 219,900
    Offer 221,300 (Accepted)
    Inspection credit final close 209,900

    11/09
    22 Units in four buildings
    M and I Bank
    Listed 1,290,500
    Offer 900,000
    Inspection credit final close 825,000

    2Reply
  • Matt Feato
    Real Estate Investor · Springfield, MA · Member since 2010 · 49 posts · 10 votes
    16y

    I'll go back to one I couldn't close on.

    3/1 - Indymac owned (at the time)

    ARV I believe was about 130K at the time
    Repairs: 15-20K (some shoddier work done over time that one could still let fly if "desired" but it did need some updating either way)

    Asking I think at the time was $92ish.

    Offer 79,900 (accepted)

    Turns out Indymac wanted to dump it before the FDIC cleared it out so they wanted 10 days to close. Couldn't get it moved that fast.

    FDIC sold it 6 months later for 118K.

    2Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    16y

    So you tried to tie up a property from the bank with your only exit strategy of flipping it to another investor? You should have a money partner ready to help you close if its a good deal.

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    1Reply
  • Joe M.
    Real Estate Investor · Hartville, OH · Member since 2010 · 148 posts · 174 votes
    16y

    Deal 1

    HUD Property
    Listed at 18K
    Offered 15K Accepted
    Needs 5K in rehad
    Hold and rent at $550/Mo

    Deal Two
    Wells Fargo
    Originally Listed at 38K
    On Market 30 days dropped to 32.7K
    Offered 22K
    Counterd at 30K
    I countered at 25K
    They countered back at 27K I accepted.
    Needs about 2K in rehab
    Hold and rent for $750/mo.

    2Reply
  • Tom C
    Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
    16y

    Joe, $30K investment with results of $750 per month is very good. Same process I have been following and have been very successful.

    My only concern is that you mentioned that you were out of state/ out of country very often.

    Who is managing your property and tenants? Getting those kinds of deals you are working in Akron, which is the same game I am playing. Just a different area and Akron is very difficult to break into unless you have the right connections.

    If you are not on top of your tenants continually, you will have nothing but problems

    1Reply
  • Scott Karg
    Real Estate Investor · Jarrettsville, MD · Member since 2010 · 76 posts · 12 votes
    16y

    deal in progress.

    This will sound silly but I have no idea who the bank is, but Service link is handling their end.

    Baltimore Md 21213 4bdrm
    List price was 54,600
    Offered 46,500
    They accepted offer.
    DOM 49 days and counting 25 days when I made offer.
    Needs approx 8000 rehab.
    Rents in area 1400-1500
    ARV 130,000

    Original closing date was 5/7 they extended till 5/14, they extended to 5/20.
    There is a judgment against a former owner, and we want a letter of indemnity to insure this title. They insist judgment doesn't follow property, and say they will charge me the $100 per diem if we don't close. What a joke, where's MY per diem for them not closing on the 7th? :lol:

    Hopefully we go to the table Thursday, there are deals galore out there, I want to get this one rehabbed and rented so I can get my next one!

    1Reply
  • Tom C
    Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
    16y
    Originally posted by Scott Karg:
    deal They insist judgment doesn't follow property, and say they will charge me the $100 per diem if we don't close. What a joke, where's MY per diem for them not closing on the 7th? :lol:


    That sure sounds like a Fannie property. They put the same rule in my contract. You should be able to look up the current owner on your auditors site.
    0Reply
  • Joe M.
    Real Estate Investor · Hartville, OH · Member since 2010 · 148 posts · 174 votes
    16y

    Tom:

    Both of these properties are actually in the canton area, not akron.

    As far as dealing with issues when I'm out of town, I'm usually only gone 3-4 days at a stretch, unless I'm traveling oversees.

    At any rate, I'm investigating some options to handle any major issues while I'm out of town. Any suggestions?

    1Reply
  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    16y

    My first REO purchase was in Oct 2001 from Bankers Trust of CA.

    My agent let me know about the property before it got listed in MLS. At the time a property like that would have gone quickly. I had a PSA the next day.

    List 155K
    Purchase 149K
    Still holding property
    Property was 2/1 on 22,500 lot
    Rehabbed when purchased now 3/2

    After rehab 30K in 2001 a CMA was done valuing the house 225K

    The houses rents for 1200 and is below market rent but has very good tenant that does some additional work. I will be short platting this property in the coming year and expect to sell the house at about 280K and keeping the new build-able lot for another house. Land is currently valued at about 100K and the neighborhood is mostly newer with some homes in the 500K range.

    1Reply
  • Tom C
    Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
    16y

    Canton area, even better. I would suggest a good friend or family member. I really dislike property management companies. You could always run an ad on CL for someone in the construction business, but my concern would be, then you are trusting your business and your customers to someone who may not have any idea how to legally handle certain issues. So then you are right back to using a property management company. Boy, I don't know. I would only trust family or a close friend.

    0Reply
  • Joshua D.Pro Member
    BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
    16y

    Guys - Lets get back on topic please.

    Podcast Guest on Show #100
    1Reply
  • Scott Karg
    Real Estate Investor · Jarrettsville, MD · Member since 2010 · 76 posts · 12 votes
    16y

    Earlier I said I didn't know the bank. Turns out it was Deutsche Bank or DB as I will now refer to them as...

    Between them and Service Link, I felt like I was in a funhouse at a carnival, but I did close last Thursday and am well into my rehab!

    0Reply
  • Wes S.
    OP
    Developer · Cedar Rapids, IA · Member since 2009 · 97 posts · 42 votes
    16y

    There has to be others out there...lets hear it!

    Also, one good resource for HUD REO's, go to www.best-assets.com ---Click Listings/Bids --- Pick State you want ---- On Left side you can choose 'Bid Results' ---Choose City or County or Select All' which will bring up the last couple months of deals with DOM, List Price and Accepted Price'

    This gives you good the facts of what HUD accepts and then you can base Adjust your offers accordingly....

    1Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    16y

    Michaelson, Connor, & Boul, Inc. is the rep for some additional states. They also have the bid results posted for a while after something sells.

    0Reply
  • John Klahn
    Real Estate Investor · Denver, CO · Member since 2008 · 47 posts · 22 votes
    16y

    This is my recent purchase. It is not technically a REO situation but we were dealing with the bank buy a short sale listed on the MLS.

    FNMA short sale (with 90 day deed restriction)
    Listed at $90K
    Initial offer $70K
    Countered at $87K
    I countered back at $70K
    Accepted at $70K
    Closed 6/28/2010
    DOM: ~45

    I have to say, this was the quickest response/closing that I've experienced with short sales.


    Cheers

    0Reply
  • Doug Haisten
    Mobile, AL · Member since 2010 · 238 posts · 44 votes
    16y

    Congrats John on that fast turn around. If I may, what was the amount of repairs needed and the ARV of the property?

    Doug

    0Reply
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