We are small investors, husband and wife team. August 2008 we purchased an REO home from Countrywide, refurbished it and now we are selling it February 2009. Here is the story:
When we first started doing this was middle of 2007 we were concentrating on Short Sales – looking for property via legal newspapers, and coming accross people who are in financial trouble. We bought one house this way. We were not super satisfied. Looked into few more Short Sale deals – did not aquire any more on Short Sale deals. The biggest deterrent for us was that during the redemption period the owner of the property still has to agree to short sale, and they would pull from their commitment at the last minute – and they have the right to do so.
Being a bit flustered with this we started looking at REO homes – The property owner is gone, and done with, just the financial institution. Knowing that Countrywide, Wells Fargo, Ocwen, Lasalle (now Bank of America), GMAC, etc are some of the largest lenders, and we have run into them during our short sale efforts – we started with their website listings. Overtime my wife became quite savvy and finding many websites, no cost to us and view REO listings.
Then the next hurdle was to work with a real estate agent who is willing to forward the offers to the bank without a whole bunch of personal opinions – Just Write The Offer! The REO specific Real Estate Agents are bit different. Anyway, we eventually found a person who would do this for us. As a Note: we became good friends with her, and we still use her looking up properties.
So, our research for properties comes from multitude of websites, and through Real Estate Agent sources. I think my wife is savvy enough to find properties before the Realtors know about them. We are small but this is a fantastic trade secret – gives us an edge to make offers. We like to be in a lot of debt – if we had funds which does not have to be paid back – so to speak – we can kick up the volume. So this a short background of who we are.
OK, back to the specific deal I started of writing about.
As I have mentioned above this property is in Detroit. Found this property through Countrywide REO listings, in Detroit, MI area. If you are in Detroit, this property would be considered to be a West Side Property – which a terminology we use to market the property. People have definite preference based on the terms East Side or West Side property.
This home is a 3 bedroom Bungalow, 2 1/2 bath, finished basement. Fireplace on main floor, fireplace in basement. All brick construction. The asking price from Countrywide was $18,900. We are small investors – so we always visit the property, inspect it for ourselves to make our decisions. We offered $9,900. Countrywide accepted our first offer. First thing we said was – Bummer!!, should have offered less. Anyway that's how it goes. Refurbishing cost was approximately $3,600. We are selling it for $46K, under land contract. The credit market being bad – this land contract will carry us for 12 to 15 months, then the buyer will get a regular mortgage and we can cash out.
In 2008 we purchased 6 homes, price range from $24K to $9.9K, Still have to refurbish one more home. They are all rented out. Each of these 6 homes taught us a few things to do, things not to do. We are good at it now. This particular home acquisition was a good experience. Market is flooded with properties at a great price. We are very simple no nonsense team, trying to get ahead in these challenging times.
There is no such thing as “Get Rich Quick” – It takes a lot of very sincere & true time and effort.
Ann Arbor, MI