|
Gilbert, AZ - Sub - $65,000 REO (Bank Owned)
Gilbert, AZ - Sub - $335,000 REO (Bank Owned)
|
REO – Bank Owned Property What's the REAL take on REO properties? Are they really a great deal? Like anything else, it really comes down to how you're approaching the opportunity. Not always, but much of the time REO properties need a little work. A little love. Those that gave up the house/property (foreclosure) might not have been in the best of moods. This might appear in the way the property presents itself. I've seen entire kitchens missing..lol It's super common that appliances are gone, yards are over grown ( this part is getting better), and the strangest colors make it to the walls. The KEY HERE is to look PAST these issues. The minute I walk into a home, I feel like I have ex-ray vision. I could careless about the paint, flooring, bathrooms, and even the kitchen. I focus more on where the rooms are located, what the general flow is of the house (even this I like to change), and what the neighborhood looks like. Most things you can change, but where the foundation is poured is a bit more challenging...lol. There are three types of people. Those that can handle doing a renovation, those that “think” they can handle a renovation, and those that won't last 10 minutes... I call the first group the “Ten Per-centers”. Most of us “think” we can handle a renovation, but the honest fact is, most can't. Does this mean if you can't hammer a nail you shouldn't look at REO properties? Well, maybe. On most REO's the costs can balloon out of control if you hire everything out to sub-contractors. Now, if you're talking about paint, flooring, and not much else, you'll be fine. Start adding plumbing, wall removal, and electrical it's becomes a potential money pit. Are any of the above too difficult for the average person? Nope..! I once installed a difficult floor with a tool in one hand, and my computer in the other...lol. You can find anything online these days. And I'm not talking just text, but full blown, easy to read, directions. REO properties are a HUGE goldmine if you walk into them with the correct attitude. The video on the left is the perfect example. Someone could buy this home ($65k), gut it, put in a new kitchen, flooring, paint, some minor plumbing, minor electrical ($20-$30k) and have a $125,000.00 home. Oh, AND IT'S THE WAY YOU WANT IT.. Find that in a move in ready home... Move in time? Nice try...lol. If I said 60 days, it would be 90. The trick is to be focused. It's happened to me. I've start out thinking only a few items need fixing, and before I understood what was going on, my 4 item list now takes two pages...lol. If you're buying the home as a investment, and plan on renting it, every improvement should be looked at as a potentcial money maker. If you put granite in the kitchen, will you get more rent per month? Knock out the shower enclosure and put in tile... More money upon resale? Don't renovate based on what YOU like, but rather on what you're return will be. I, personally feel that if I renovate to a standard I would live in, I'll get my money back (and then some). Others feel VERY different. Oh, back to the home above. If you put a $25k pool in the backyard, you're still in the black. By the way, have someone else do this for ya..lol Making a smart REO purchase takes a TON of research. Numbers NEED to be crunched, BEFORE you get too excited. You also need to have a grounded perception of what you're willing to handle yourself, and what's going to be completed by outside help. When I say, “Get the first REO under your belt, and the next one will be a snap!”, I mean it. |
