The bank assigned yet another property to me to list. This is about the 8th listing I have received from the same bank this year. How nice! The property had been gutted by who knows who? I thought it was the previous owners but a young man who approached me later the day I went to show the home to investors told me that the work was being done by people who had no deed to the property. No wonder they were given an injunction to stop work on the property by the county.
The ghostly property had been vacant for over a year. The project manager at the county who had been assigned to the property breathed a sigh of relief when I told him that the bank had assigned the property to me. To prevent arson and further damage to the property the guys from the county had boarded up the duplex. Nonetheless, neighbors had continued using the front yard as a dump for their old mattresses and other discarded household items. As soon as I took over the property the first thing I did was ask my handyman and his crew to remove the trash.
I soon did my BPO (Broker Price Opinion) on the property and recommended a low list price. Since this was a major rehab I recommended for the bank to list the home for less than $100,000. Though the after repair value (ARV) was way above $350,000, it'd take at least $100,000 to bring the 2 unit dwelling to livable condition, thus my price recommendation.
The bank had to base their list price on my opinion and that of the appraiser. A month and a half later the asset manager came back to me with a $101,150 list price. A few days later I put the property on the MLS. As soon as I did, I started getting calls left and right. I did not want to spend my weekend being a receptionist and a sounding head, so on Friday October 23, I wrote on the MLS that I'd be at the property between 2 and 4. As soon as I got there, tons of investors met with me, all wanting me to represent them and help them get the deal. What a nice problem to have, eh!
I told them that I had to be fair to all players, so I'd not release the prices others were paying. The terms were the same: all cash, no contingencies, non-refundable deposit for the winning bidder. I could have easily started a bidding war there and then if I made the offer prices open. Just amazing! At the end of the day, I received offers over 50% of the asking price, all cash.
People have money and are incessantly looking for opportunities. This market offers them such opportunities. I just wish we had enough inventory. Demand is extremely high among investors, who are mostly all-cash buyers, and first-time home buyers, who are mostly FHA buyers.