Best Value in small REO package

Currently available a small group of bank owned homes at a huge discount for cash or hard money buyer.

The package consists of 4 SIngle Family Homes that need minor cosmetic repairs (typically carpet, paint, light fixtures, landscaping). These homes make great rentals or flips to first-time buyers.

Here are the properties:

Property #1:

Karling Pl, Palmdale, CA 93552

Property #2:

Barcelona Dr, Palmdale, CA 93552

Property #3:

La Contempo Ave, Palmdale, CA 93550

Property #4 (no picture yet):

Dianron Rd, Palmdale, CA 93551

Let’s look at the numbers

Total amount of last sale: $1,309,000
Total Tax Assessed Value: $1,210,000
Recent sold comps: $740,000 (almost exclusively REO – foreclosure resale comps)
Total “ARV” for quick sale: $875,000

Your package price: $539,700 (61% of ARV; 41% of last sale; more than 25% below recent sold REO comps)

A couple of things: The package price includes all assignment fees and commissions. You CAN break up the package and buy single or multiple properties. The price will be 3% higher in that case.

About sold comps:

There are a total of about 50 RECENT SOLD COMPS for the 4 properties included in this package. Only 2 or 3 of them are NOT “foreclosure resale” inventory. What does that mean?

The banks are controlling the market. In an “REO market” the banks are setting the prices. In this case in Palmdale, CA banks dropped their prices by 43% to get foreclosure inventory sold. This is pretty bad for the neighborhood, but keep in mind that these sold comps are mostly “distressed properties” that had to be sold quickly and needed work.

How can you make money?

“In real estate you make money when you BUY.” – OK, so first you have to BUY this package, otherwise you cannot make any money on this deal.

Then you have two options with different “exit strategies”:

1. Fix and Flip. Do the cosmetic work, bring the homes in good condition and resell them for the “quick sale ARV” price. (With this strategy we estimate your net profit potential – after all costs of holding, fixing and selling – at $80,000 to $120,000 within 4 months or less.)

2. Fix and Rent or Lease/Option: Do the cosmetic work, bring the homes into good rent-ready condition and enjoy long-term appreciation, tax benefits and wealth building. You could plan to refinance to get all or most of your invested cash out and still enjoy great monthly cash flow.

3. Combine 1 and 2: Sell two, keep two, or sell 3 homes and pay the 4th one off.

Savvy investors buy when the market is down and inventory is on sale. This time is now.

Email me for more information on the package. If you need financing, look at this great, free resource which includes lists of nationwide hard-money lenders and other funding resources for all the deals you can handle.

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