over priced REOs

8 Replies

after rehabbing/selling my mother-in-laws house, we decided to keep going and find another flip. We are looking in Waukesha County, Wisconsin. Our agent agrees that the banks are setting prices too high in our area to make a profit. We are in the starter home single family, 2-3 bed, 1-2 bath focus. Surprisingly some of these are selling, they must be all cash, which we are prepared to do, because no bank would lend for these dilapidated properties. Is this a local problem, and if so, how is anyone making any money this way?

A couple years ago in that area,  you could find hundreds of REOs that were great deals.  Not anymore.  Id suggest not focusing on listed properties in that area... 

Thank you, at least I know I'm not just being impatient. Your advice to not bother with the listed properties makes sense. Time for a new strategy...

Listed properties typically will have a broker associated with them that knows what the market will bare. Waukesha County is doing good and the foreclosure rate is not very high. Plus there is enough demand to support the rising prices.

You would be better off looking for off market units or trying to hook up with a bank/financial company and getting them before they hit the market.

REOs on the market are higher priced here in CT as well. Last summer it seemed there were plenty of deals, but so far this year they are coming onto the market high! It's not just you.

thanks for your input everyone-much appreciated!

if you have the cash to close in full the next day, you might try the foreclosure auction. Even tho listed properties are typically high right now, we are still getting REO's and Short Sales under contract; granted, this is by making lots of offers, and giving up both sides of the commission many times. You could offer this in some cases and just pay your realtor on top of the contract price, but obviously factor it into your calculations. On the dilapidated houses, that are not financable, we just make lots of offers and watch for 60 and 90 price drops. It's a timing thing and we try to make the offer before the listing agent posts the price drop for everyone to be notified...it's a numbers game :)

Thanks Thad, very good advice

good input. Like everything else it is staying on top of the listing and being persistent. thanks Don

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