I looked at yet another REO last night and confirmed my intention feelings on REOs.
Price: 117 k
After Repair Value (ARV): 140-150k
The condition was ok for a rehab, but the problem was the floor plan. The house has taken on 3 different remodels and floor plan is a disaster! Imagine a house inside of a house. Its now a four bedroom and has only one bathroom! The floor plan is just nuts.
Every room needs tons of work from bottom to top. The lender finished the roof w/ a warranty. The guy did tons of electrical not to code, A/C not hooked, water heater not hook up although looks new.
The amount of time and cost to straighten out the electrical to code and making a new bath room is just crazy.
Guess what? There's four offers on it thats over asking price. Let's say you sold it for 150k full asking price and used a realtor. You sitting at 138k after closing and realtor costs(150*.92). If you bought at asking price, thats 21k for all buying costs, repairs, and profit.
Am I the only logical and rational investor in Tucson?
I'm going to track this one for the next year and see if the investor will make money. I'm afraid that investors are confusing the comps with another neighborhood thats almost across the street. Thats considered another world compared to this neighborhood. I bet the new owner will be burned.. I've seen it before.