REO Start to Finish

[Will Barnard]

This thread is about a recent REO deal I have done from start to finish (well, finish line is in sight) to help educate and inspire others to do the same.

Property details: 4+3, 2300 sq. ft, pool, spa, view, quiet street, great neighborhood, huge open kitchen with island.

This was an MLS listed property (I don't do these often) which was listed too high and received very little activity due to the over pricing. Long story short, I was able to contract it for $266k and I have since put $40k in rehab into the property.

Original estimated rehab budget was $35k so $40k is within the 15% contingency expense I always add on in my estimates.
What created the overage? Pool needed new tile which I did not originally budget for plus the size of the pool replatser job was greater than anticipated. Excess cost $2000
Appliances for kitchen were estimated at the usual $1500 for all stainless steel stove/oven, micro, and dishwasher. Ended up paying $3100 because I used a double oven (GE profile on clearence), & 36" inset range top rather than a slide in combo unit. At the suggestion of my agent, I moved the vinyl fencing seperating the backyard pool area from the front yard and brought it out into the front yard (to increase the backyard size) approx 15 ft. Extra cost $1500. Then there were the usual misc. extras.

Property is rehab complete, placed on MLS at $398,800 and had open house both Sat. & Sun. Received offer yesterday and am in the process of negotiations through counter offers/replys.

Assuming I settle at $390k for this property with current buyer, here are the numbers:
$266k purchase
$ 40k rehab
$ 23k re-sell costs (agent fees + title/escrow + recording)
$ 7k loan interest/costs Took $200k private investor loan at 12% + 2nd investor loan of $25k @ 12% (BP member)
$ 2k acquisition costs - rounded up (escrow/title)
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$ 52k net profit before taxes inside of 3 months! Acquisition close date was Jan 25. so I have until April 25 to close sale escrow and stay inside of 90 days.

Have any questions, ask away, I am hear to help.
- Will Barnard

[Will Barnard]

OK, my video for this property is now edited and complete. It is now available to view on youtube.
Here is the link:
http://www.youtube.com/watch?v=v_iL0LAJ-qA

- Will Barnard