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In the spirit of another web savvy contributor in town here I thought I would chronicle our most recent acquisition & rehab. While their company focuses primarily on single family homes I deal primarily in multi-unit dwellings.
The Hyde Park four-plex came on the market early this year for $150k which was too much based on the amount of work it needed. After the owner lost it to the bank and it was re-listed for $45k I made my move. The important aspect of finding a property like this one is looking at it before it is a good deal so that if and when it has a significant reduction in price you can tie it up before others get their valuations ready for an offer. Since I had already run my numbers on the property early in the year, we were able to tie it up very quickly with the bank.
Dealing with a bank/institution on an acquisition like this is always an adventure. It is a different animal than dealing with a typical owner. For one, banks typically take 1-4 weeks to get responses to you. That means don’t expect to get an answer to your offer within a reasonable time period. Secondly, banks aren’t emotional about the terms and conditions of the contract, that makes it easy for the buyer to offer what is fair and reasonable in relation to what is actually happening in today’s market. A conventional seller will get offended often times and close the doors on a deal based on a principle. That is not the case with banks so negotiations are often easier to handle in these transactions.
The banks will require you to jump through quite a few hoops with the lengthy paperwork and almost never make repairs, but if you know this going into it you can figure it into your offering price & expectations. Although it can be a headache to get to the closing table, these are the best deals in town for those who can finance it or better yet, pay cash. Once we close (early next week) I will talk through the financing side of this deal.
We made an offer and now closing is almost exactly 30 days later. So far I have been very happy with the agent representing the seller (Bank), the Title Rep (Bank’s choice) & time required to get everyone on the same page.
If you have any questions or comments about dealing with banks, reo’s, foreclosures, short sales, etc., we would like to hear them.