OK so I have crunched the numbers on at least 15 - 20 properties. I have visited over 12 of them and I have selected one to submit an offer on. I will be working with my R.E. Broker to draft the offer letter and expect to submit it on Monday.
It is a bank-owed 2 unit, 8 total bedroom property. It was under agreement but the previous buyer couldn't get funding and it went back on the market this week. Asking price is $124,900 and I plan on offering $109,912 to start. Even at $124,900 I think it is a good deal because average rents for a 4BR in this area are around $1200 a month. It is on a quiet street close to the major highways and shopping. The other properties nearby seemed well cared for and there are only houses on one side of the street. The other side of the street is the back of a large warehouse and associated fenced in parking for the warehouse.
I don't plan on wholesaling so I am mostly concerned that the offer letter have contingency clauses for professional inspection and mortgage.
How specific should I be in the offer letter? I can afford the full asking price, but I don't want to pay that much. I also can afford to do 80% LTV and cover closing but I would rather do 85% or 90% LTV and have the seller cover closing costs.
I think I want the contingency clause to state "Mortgage of at least 85% LTV with an interest rate no higher than 7.75% with a 30 year amortization period". I have already been "pre-approved" for better terms than these, but nothing is certain until the closing is over.
Also should I bother asking a "Bank" to cover closing costs on an REO? Do they ever do that?
Any other things I might be over looking?
Thanks for all the help and support you guys have given me over the last month. I can see the light at the end of the tunnel. Lets hope it is not the train coming.
It is a bank-owed 2 unit, 8 total bedroom property. It was under agreement but the previous buyer couldn't get funding and it went back on the market this week. Asking price is $124,900 and I plan on offering $109,912 to start. Even at $124,900 I think it is a good deal because average rents for a 4BR in this area are around $1200 a month. It is on a quiet street close to the major highways and shopping. The other properties nearby seemed well cared for and there are only houses on one side of the street. The other side of the street is the back of a large warehouse and associated fenced in parking for the warehouse.
I don't plan on wholesaling so I am mostly concerned that the offer letter have contingency clauses for professional inspection and mortgage.
How specific should I be in the offer letter? I can afford the full asking price, but I don't want to pay that much. I also can afford to do 80% LTV and cover closing but I would rather do 85% or 90% LTV and have the seller cover closing costs.
I think I want the contingency clause to state "Mortgage of at least 85% LTV with an interest rate no higher than 7.75% with a 30 year amortization period". I have already been "pre-approved" for better terms than these, but nothing is certain until the closing is over.
Also should I bother asking a "Bank" to cover closing costs on an REO? Do they ever do that?
Any other things I might be over looking?
Thanks for all the help and support you guys have given me over the last month. I can see the light at the end of the tunnel. Lets hope it is not the train coming.
Posts
No comments:
Post a Comment