My first REO Purchase

Thought that I might post about the first REO Property I purchased.

 As a real estate agent, I run across deals all the time in my area.

I live in the small town of Circleville Ohio. Home prices are generally strong in terms of appreciation , although our median price is much lower than many other areas in the US.

Our median price is around $125,000 , the home was purchased in a area where median prices are $80,000 to $90,000 and consisting mostly of 3 bedroom , turn of the century homes.

The home was not listed on any local MLS systems, because the property was listed by an out of town broker. This gave me an advantage overall because most real estate agents weren’t aware of it. The property was an HSBC bank REO asset, and in general I knew their policies as I’ve worked with them in the past concerning loss mitigation.

The property was listed at $47,900 , and originally listed at $54,900 , it had been on the market for around 3 months total.

The property had a tarp over the complete roof, the few agents I did talk to said “Well, that home has leaks in the roof, no one will buy it”.

Thankfully after consulting with agents I know in the area, I estimated that the roof WAS NOT in bad shape, and we put an offer on the home.

We successfully purchased the home for $46,000 with about $1,750 in seller paid closing costs.

All in all , we spent about $3,000 in repairs to the property. We installed new carpet, laminate floor and baseboards. We also painted throughout , installed a new water heater, replaced gas-lines and patched the holes in the roof caused by nailing the tarp to the roof. Total rehab time was about a month and a half (This was wayyy longer than needed).

I learned from the first property to:

Have contractors lined up for repairs to the property, even if you don’t expect certain repairs, they might come up in the mean time.

GET UTILITIES TRANSFERRED THE DAY OF CLOSING! We had an awful time since we did not transfer them from HSBC to myself after closing , instead we waited about 5 days to start the process.

Know as much as you can about home repair and doing small jobs before you buy a REO property! You’ll save A LOT of money by knowing how to patch drywall, fix small plumbing leaks, and cleaning out the furnace. We spent about $500 we didn’t have to, that could of been fixed with a little know-how and a couple of hours.

What was the outcome? We now own a rental property that brings in $675 per month and it’s in BETTER condition than when I rented it out, good tennants are GREAT to have.

On the open market I would expect it to bring about $75,000 to $80,000 should I choose to market it via MLS and all the normal means.

Are you looking for a list of Foreclosures/REOs  If you are, I have a MASSIVE database of REO specialists all over the US that would love to give you a real-time list of what’s available in your area. Send me an email at Brandon.Schlichter@RealLiving.com and I’ll set you up with a Licensed Professional that will help.