Posted by Dale Oh on April 09, 2000 at 09:01:11:
If 99,000 is the banks first offer, this is not there lowest price they will except. Deduct 20% off the asking price, figure your repair expenses and subtract that from the 20%.
I s there a deal here? - Posted by Roland
Posted by Roland on April 09, 2000 at 07:16:12:
I found a bank owned SFH property listed for 99,000 in ocean county, nj. Property needs some work, nothing major, mostly cosmetics and clean up. New constuctions all over the immediate area. The neighborhood is growing tremendously. Comparable properties in the area have sold for 125K ~ 135K. Any examples of how this deal could be structured?
Re: I s there a deal here? - Posted by Ed Garcia
Posted by Ed Garcia on April 09, 2000 at 11:00:57:
Roland:
I thank there is a misconception of what a deal is.
Good deals are not always found, but are developed.
It?s with our knowledge and skills, we work a deal into becoming a deal.
There is no question that if your information is correct, that there is a deal here.
In order for me to give you sound advice as to how to work this deal, I would need to have more information about the property, what?s going on in the area, and the bank
that?s holding the REO. I also would need to know about you and your financial circumstances as well.
Roland so many times I watch someone give advice so freely with out having all of the
facts.
After saying that, I will now shoot from the hip and give you some suggestions in the blind.
(1) Try to find out what is owed on the property?
That is most likely the number the bank will take plus their cost to dispose of the property
such as commission to the broker who listed the property etc.
(2) What?s going on in you market place?
If you?re in a hot market, the bank is no fool, and will test the market. It?s obvious that if
you are correct about the values of the comps, that the bank is attempting to sell the property below market for a fast sale. So I wouldn?t play with it to much, they may be
getting offers as we speak. If the market has cooled off in your area, then there may be
more room to play.
(3) Ask if the bank is willing to provide financing?
With out knowing your financial condition, this deal could be a natural for some good
financing. If it is a out of the area lender, chances are they?ll want to be paid off.
If the lender is a local portfolio lender, there could be a great opportunity for you to
obtain some good financing with little down.
A rule of thumb is that they?ll want enough down to cover the commission to the broker.
(that?s not carved in stone) It?s only rule of thumb.
If your credit is not up to snuff, and you don?t feel that you are a bankable borrower.
then I would need to know more about you and what you have to work with.
Roland, I won?t go into that now because I don?t have enough information.
I can tell you that many people think that you need good credit to do deals and that?s
not so. As a matter of fact I?ve owned my own mortgage company for 20 years,
as was doing sub-prime loans before the term was coined by the lending industry.
But since you have given no indication of credit problems, this point would be mute.
Roland, according to your numbers, this deal is starting out between 73 and 79% LTV
Not counting differed maintenance to which you have stated is cosmetic.
I?d say if you?re right with your information, and you fine tune this deal with a little negotiation, you have a deal.
Roland, If I were home or near my office, I would allow you to call me, and I would
help you work your deal. Unfortunately I?m out of town and unable to be accessible.
I?m working on my workshop and just had a few minutes of down time.
Good luck on your deal,
Ed Garcia