Stacey Maxwell

• Manage |RSSForeclosure Real Estate Investor

Chicago is an excellent market. I say this because as a whole the Chicagoland area is very stable. Because the area is so large, it is impossible to give an average market price, as the pricing varies greatly from neighborhood to neighborhood, suburb to suburb. I see you are in the Miami area. I am a native Miamian myself. Typically, however, we are priced less than South Florida, in comparable neighborhoods. If you are interested in the investment opportunities in this market..................they are awesome, if proprety is purchsed correctly and in the areas that fits the strategy that the investor is looking to employ. I personally buy SFRs of 3 bedrooms or more, in working class neghborhoods. At this time I am picking up homes out of foreclosure in for between 30-75k that need some work. The work necessary can't place the total cost for acquisition and repair at more than 100k. With this in mind I look to having an after repair value of between 120-175k, placing the properties in the posistion to be rented and cash flow beautifully, or to be prime candidates for sale to a first time buyer. Hope this answers your question.

Don't give up if it has been rejected at auction, there is post auction bidding that still goes on. Additionally, there are cases where they can't get in touch with the investor the day of auctio and have to reject based on the reserve amount they are given pre-auction. It is possible that the offer will be submitted post auction and the investor will accept it. Believe it or not, there are many properties that are being sold at these auctions that get bid up past where they could have been picked up pre-auction.

You left out one of the most important yet least discussed aspect of an REO transaction. The majority of the banks that have REOs are only the servicers of the mortgage loans. In otherwords they are responsible for collecting funds and managing the accounts for the loans that have been sold to individual investors. These investors have bought packages of loans known as mortgage backed securities, made up of many mortgage loans. Each investor has their own risk tolerence. These investors are often hedge funds, pension funds, REITS ..... The sale price of the REO is, and must be determined by the investor not the bank. During the REO period the perameters for the individual investor may change, and there can often be a lack of communication between investor and servicing bank. Unfortunately the bank appears to be the glitch when often that is not the case. Best advice to buyers of REOs is to wait a minimum of 30 days after the REO has come on the market to begin the process of initiating an offer. Even better to wait 60-90 days. You'll do much better job of negotiating.