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As promised, here are more questions. :) Didn't take me long!

I researched this neighborhood some more and it is full of REOs being flipped. There are 10 homes for sale at $70K or less right now, plus another 5 under contract at 60K or less. The neighborhood has 40 homes for sale at 100K+. Half are flips, half are owned, and 4 or 5 are under contract right now.

I guess that there's no wholesaling to be had here, because this neighborhood is already a feeding ground for REIs.

For flipping, though, it seems to be a real winner. Estimating a $65K purchase price with $95K ARV, after $10K of xactn cost, there's $20K of room to move in there for repairs and profit, and plenty of homes to pick from.

What would you do? I have to think about it...

No apology necessary, and I guarantee I will ask more questions!

No worries, I can take it!

I definitely appreciate this resource because as you said it is definitely cheaper than making mistakes in the field.

Ben

Thanks, for pointing out some of the obvious things I did not think of or make clear. I am working on finding out more about the property.

Obviously I am not ready to jump on this, but I am still learning and this deal analysis is part of it for me.

Thanks again,

Ben

Hello,

I am new, but learning a lot, and my last post was just like this one - seeking opinions on a possible deal.

In my area I found an REO on the MLS for $70K, while other houses that are comparable on paper are listed for nearly $100K and selling. This house needs TLC, but the ARV is probably $80-90K, right? (if similar houses are selling listed at $100)

Obviously I have no idea what kind of work needs to be done on this place. Should I call the realtor and get a showing? Drive by and peek in the windows?

If this is a deal, I will not be surprised if it slips out from under me b/c I waited too long. I want to wholesale the property, but at this time I don't have a buyers list, so I would have to make one fast.

How should I find out what repairs are needed?

Thanks!!

Ben

I am not in REI yet, and I'm still new to the forum. I am saving, reading, learning, and waiting for the time when I will pursue my first deal.

I am an Electrical Engineer, MBA student, and personal trainer. I too keep pretty busy! I am looking forward to having more of my own time to spend.

Thanks Mike, atarget, and Jim for all of your tips.

I agree it's not a good deal, but this was a great exercise for me to do the analysis.

Is there a Cincinnati REIA meeting tomorrow? I see the OREIA meeting on their website.

I will keep looking, and thanks again for this great community!

Ben

Thank you all for your thoughts, I really appreciate the guidance and insights!

It seems there is about $260K in 2 mortgages against the property, minus any equity (doubtful). What factor does this play in determining minimum price, if any?

If the current owner sold tomorrow for example, would the banks have to approve the offer? I think it is too soon for that, the current owner could sell but would still owe the difference. Is there a reason he would want to do that?

Alternatively, I could go to the auction, or wait after the auction until it becomes an REO on the MLS.

Recovery is possible up to 8 days after sheriff's sale in my area. It varies widely, that is for sure.

Correct, it's a sheriff auction. I guess it seems like a pretty good deal?

I think the best strategy would be to contact the owner and try to buy from them. Would this possibly get a better price than the min bid? Does it depend on how much equity is in the house? (there's probably none)

Waiting until the lender has it (and it's an REO) would only raise the price, correct? My impression is that lenders are unwilling to deal unless a house has been on the market a long time.