Re: Offers on REO properties - Posted by Bill S. (Ohio)
Posted by Bill S. (Ohio) on January 23, 2002 at 05:28:39:
Rob, I don’t think you’ve been investing very long. I don’t say that to be nasty, but just about every experienced investor on this board has done a true ‘no money down’ deal with a bank.
My first investment property was a REO—the contract price was $27,000 and the Texas bank that owned it provided 100% financing!
As for the 80%, walk into the bank you use and ask them how much you have to put down to purchase an investment property. They usually say ‘80%’. Then ask them if they would lend you 80% of the market value of a property----the answer is usually yes. The reason is that banks have all sorts of ways to cover their buts in case of foreclosure UP TO about 80% of the market value of a property. So, that’s why they ask for 20% down and usually don’t care where they get it from.
Right now I’m in the process of buying a small, stand alone commercial building with two businesses inside. I’m buying the property for less than 80% of market value, and I’m asking for a loan at 80% of market value so that I can use the difference to pay off some bills (yes, you can also get cash at closing). The property was completely rehabbed within the last five years with just about everything new. So far, not one lender has balked at loaning 80%—would you if you were a bank?
So Rob, ask the bank you’re now dealing with. If they say ‘no’, go ask another bank until you find one that does. The banks I deal with are mostly big regionals that you won’t have in Florida—but lending practices are pretty standard. DON’T BE AFRAID TO ASK FOR WHAT YOU WANT!!!