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  • Profit from REO's in Indiana

    Hi all,
    Looking for some suggestions. I live in north central Indiana and we have a lot of foreclosures and REO's here. As an investor what is the best way to acquire and turn for profit these properties?

    Thanks,
    Jeff Middleditch
    propertyhelp5@aol.com

  • #2
    Find a good Realtor who is familiar with which listings are available to you,who is easily available. Do not work with a part time agent, making good purchases is full time work. I personally prefer teams because if one agent is already booked, they can generally still get you into a house quickly. Plus, everyone has different skills that they bring to the table. Married people are the best because their spouse will understand (better) when they have to miss dinner to show you your potential purchase. =)

    REO listings are always listed with a Realtor, as far as I know, unless it is a bulk sale. Non of the banks I work for allow offers to be submitted prior to the REO being active through the MLS, so a Realtor can help keep you up-to-date with what new listings are available.

    As an investor, keeping in mind that a good portion of the REO's are government owned, meaning, they are subject to the "first look initiative".

    The best thing you can do is find out when the 15 days on market will expire and if it is still active, go look at it and submit an acceptable offer. Where a lot of investors lose out, is that after the first look period expires, they have forgotten about that listing. If you track the first initiative listings, you might find yourself in a pretty desirable atmosphere.

    Government backed foreclosures have lost sight of the fact that these foreclosures are forgotten about by investors because they have moved on and there is not a natural trigger to remember. The people managing this listings would be extremely smart to reduce the price, even $100 to bring it back to the attention of the cash purchasers when they are eligible to make offers.

    A lot of cash purchasers are in the market to invest in real estate right now. I mention this because REO listings (in my area) sell for 99%+ of list price.

    You will get a lot more attention from Realtors if you are flipping the properties and promise them the listing if they help you make a nice purchase. Try to stick with one smart Realtor, but just remember, the smart ones pay attention to how they are treated. If they start to feel their time is being abused, they have to move on to the next cash buyer.

    You want to position yourself so that you are one of the first calls your agent makes when they get something exciting. Of co****, if your agent is not helping you meet your goals, find the agent who will.
    Kim Knox
    Principal Broker, Owner, ABR, GRI, PME, A-REO, REDCpro,
    541-899-7222
    Licensed to conduct Real Estate in the State of Oregon

    Comment


    • #3
      Great stuff Kim, but what do you mean when you say:
      "I mention this because REO listings (in my area) sell for 99%+ of list price"?
      99%+ of the current actual listing price after waiting time? So they are basically making full listed price offers?

      Comment


      • #4
        I'm a Real Estate Broker in Southern California. I work with many asset companies listing their foreclosures and then I sell some of them to my investors. I've learned a lot about investing from them over the years. What I have learned is when to flip and when not to. In California, investors were purchasing properties cheaply, rehabing them and then turn around and re-sale for a profit. In today's current market, that flipping of houses isn't working anymore. What my investors do now is, purchase and rent them out. Let's face it, with all these homes returning to the bank, these people need to live somewhere so they might as well be in one of your investments right? The key is look at any potential renter's credit and see if they were in one of those adjustable rate mortgages. Many were and is why they lost their homes. You can see clearly that they were paying xxx amount on their mortgage and doing fine. They began to lose when their payments went from 1,000 a month to 2,000 a month. This shows a landlord what the renters can realistically afford in rent. My investors have had great success in purchasing REO properties, fixing them up a bit and turning around and renting them out. The trick to investing is, learn to bend with the market. A Realtor can advise you on what a property would sell for and what it went rent for on a monthly basis and then decide. Generate a cash flow is the idea. Happy investing!!

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