Last weekend, (3/13/2010), I looked at about 10 REO properties in Lakewood Ohio, and submitted offers on 5. Most of the offers were below list price and WELL below FMV. One of the properties was listed at $59k. It's a nice 3 bdrm 1 fb with a 2 car garage. I offered $49k cash. After a week of fierce negotiating they accepted $51.5k. The bank was really pushing to get the sale price up to where they had it listed, but I stuck to my guns!
The house could be lived in as-is, but needs to be updated to make it really nice. My fix up estimate is about $40k to make it picture perfect (windows, siding, kitchen, bath, landscaping, HW floor refinish, AC, and paint) Similar properties on the street are selling between $110k - $125k, so I think I got a really good deal.
I'd really like to move in to this house, but I don't qualify to refinance and I don't want to tie up my $. I'm going to do some research and see if a local bank will give me a HELOC without seasoning. My credit score is decent (680+), I have a good job, no depbt, but I filed for BK and 3 had foreclosures in 2005. Nightclub business gone bad. I'll be eligable for standard financing again June 2011. Until then it's cash and creative financing.
I might try to sell it using the "auction" strategy that I learned in Dean's email video. I don't think bandit signs are legal in Lakewood, so I'll have to use some other ways to advertise the auction. I would start the bidding at $40k and hope that the winning bid is $60k - $65k. That would be a nice profit for a few hours of work.
Rehab the house over the next 2 months, list it with a realtor, and sell the property for $115k conservatively.
$115k - $51.5k - $40k - $8k (carry/closing costs) = $15.5k
Thanks for any advice/tips/tricks in advance.