INVESTORS
There is a lot of interest in buying bank owned and distressed properties these days. A lot of information, some good and some bad, is floating around about the subject. Often the information offered is for sale (infomercials), with the promise that you can make a lot of money with little effort once you know “the secret formula”. The fact is that there are no secrets, and to make money does require effort.
It’s commonly assumed that any REO must be a bargain and an opportunity for easy money. This simply isn’t true. You have to be very careful about buying a REO if your intent is to make money off of it. While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it. When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. The bargains with money making potential exist, and many people do very well buying foreclosures. But there are also many REO’s that are not good buys and not likely to turn a profit.
Most banks have a REO department that you’ll work with in buying a REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS. Before contacting either the listing agent or REO department at the bank and making your offer, you’ll want to find out as much as you can about the property and its conditon. That's where we come in.
Investment properties or income producing properties (rentals) often need more that just the market value. There is a lot of information an Investor needs to know about a property BEFORE purchasing it as an investment. For a purchase, an investor would need to know the amount of cash flow, a rental survey, operating income statement, itemized depreciation schedule, market rents and trends, cost segregation, and other information and data needed for a profitable investment.
Arizona Appraisal and Consulting can provide you with what you need to know to make an informed decision. Contact AZAC today for your investment property needs.
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