Let me start off by saying that I'm a newbie. Walked an REO today. The property has list price of $240K. After walking around with my repair estimator to give me a rough estimate of costs, I came up with $55K for the rehab. I know I don't have a keen eye for all the small details, but I didn't see any of the major signs to look for, ie mold and structure damage. Got to talking to the REO agent and he mentions that there are 3 offers on the property, 2 of whom are contractors. He then mentions that the 2 contractors made offers WITHOUT the inspection contingency (apparently, this would make a difference for the bank, specially if we come in with the same offer amount). The bank is not starting negotiations until Nov 20th. Agent offered that I can walk the property again with my own GC before making an offer. He then tells me that, when gathering his BPO, he had 2 independent contractors that gave rehab costs between 60-65K. I'm not sure if this is how these Agents usually work, but he drops a hint of, "Maybe make an offer for $205K", you never know. The ARV for the property ranges from $315K to $330K. First question is, is this even worth pursuing? Secondly, do GC's walk a property even if it's not under contract yet? I was actually thinking of even just paying somebody for their time to give me a quote. Any and all suggestions would be greatly appreciated.
@Ruel Baliong don’t worry about outside influences like Realtor, Run your number with BP calculators. If number make sense then make offer with your number. Don’t get emotional with the property, just go with numbers. GC will walk with you if you ask few of them and some will come walk with you. Numbers look little thin if it requires that much work, watch out for finance cost and holding cost. Good luck
Thanks Tan. Forgot to account for closing costs. Didnt think it would be that much.
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