Hey everyone! I've been getting really involved recently with the podcasts, webinars, etc., and I'm now hoping to get involved on the forums. I have a few questions and hopefully, you more experienced posters, can help me out.
First, just to make sure that I understand, if I was to find a property to BRRRR, I would need a hard money loan or a private money loan to secure the property. Once I acquire the property, I then rehab it and start to find a tenant. After 6 months to a year, I refinance the property with a conventional loan to pay back the original loan. Hopefully, I have equity built up into the property and can also pull out some money to put into the next deal. Hypothetically, if I want to make $100,000 a year, I would need to do this at least 2 times a year and hold on to the properties for 5 years each. Is that the gist of it?
Second, I've been looking around for some deals and have been trying to follow some of the tips that I've read/heard on BP. I was driving around my neighborhood and found what looked to be an abandoned house. I took the address and typed it into Zillow and it came back as off market. I took it to another site and found out that it was acquired by a PHH MTG Corp for an auction price of $2500. Zillow had it as possibly being worth $130,000. Now, the other site gave a disclaimer that read, "This is an REO, meaning this property has been foreclosed on because the owner couldn't meet their payments. The bank now owns this property. Most banks are not set up to own homes, and are often motivated to sell you the home at a discounted price." I don't expect to get the property for only $2500 and I should probably expect to get it for more like $80,000. I should also say that there was no contact information to get in touch with this company.
My question is, what would be your suggestion on getting in touch with these folks? I've tried googling their info, but no success. Does anyone have any positive experience in dealing with a website like this or would you suggest me finding actual owners that I can easily get in touch with. I don't want this to be a set back that stops me from getting started, so any help that you awesome BP folks can give, it would be greatly appreciated!
@Chris Hooker Welcome to Bigger Pockets! That's the traditional way to do a BRRRR, but you could also just buy an owner occupied home as a live in flip, or purchase using a rehab loan.
When the bank owns the home they can do many things. After the long paperwork process, they might sell it on the MLS, or sell it at an auction. There is usually not a lot of way to get in touch with the bank, just waiting until it hits the market. Find a real estate broker that sells a lot of REO homes.
If you are really interested in that particular property, reach out to a real estate agent and have them contact the owner for you.
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