Are you a real estate investor currently buying bank REO's and rehabbing and selling, how are you doing ?

Question

Are you a real estate investor currently buying bank REO's and rehabbing and selling, how are you doing ?

Answer 1

Yes, and No.  RE investor, yes,  buying REOS and flipping them, no.  But I am part of a real estate investors club in utah.  They search the MLS for properties listed too low and buy them, then turn around and sell a lease option on them.  It's really the way to go.  you don't have to rehab and if you do, then you don't buy it.  So, no rehab, no landlord fix it's and broken this or that problems and it's  money making deal.  They buy the house at below market, get a non refundable down payment (totally legal) and the contract is for the higher seller price, the true market value.  Many times the lease/option-er decides not to exercise his purchase option and the seller (me) retains the down payment.  It's not like it's a 20 percent down payment, so it's not that much, but we just turn around and do it again until they exercise their option to buy the property.  Now, these properties are not dumps, they are good properties, it's just that they were listied below true value.  With the lenders market the way it is, people don't qualify to buy without the 20 percent down anymore and this way, it gives them a way to own the house, building up enough equity in it to get a 80 percent loan to value loan on it later.  It's a nice contribution to the community.  It's our way of giving to the downpaymentally challanged.  Good people, just not a lot in savings.

Answer 2

Its hard to find a REO that is worth rehabbing. Most of the ones I come across are in pretty good shape. I have concentrated on flat out short sales. I just picked up a property for 185K and sold it for 410K. No rehabbing.

Answer 3

I used to do this and only did it once this year.   It was a good buy, priced 150k under value and only needing to be painted and new doors installed.   I sanded the floors too.    I sold it 3 weeks after I closed for 100k more, and both me and the buyers are thrilled.

I am hunting daily though, I at least look at every single listing within my budget, and this one is the only one I managed to get.  Most of the deals like this end up bidding too high to make it worth my while.   If I can't sell right away I can't make any money.

Presently I am buying the REO's, but not flipping, just holding.    I am able to rent everything for more then the mortgage payments.    I am just biding my time, I expect to make a killing when the market gets back to normal.    Just in tie to retire!