Last week, I posted a video about an REO in Ahwatukee my Realtor, Bill Watson, found on the Arizona Regional Multiple Listing Service.
Purchased December 20th, 2011, it went on the market January 17th. I wasn’t in much of a rush to get the rehab done in my normal 7-day window because sales are typically slow to start at the beginning of the year. I didn’t want this listing to die on the vine while homebuyers recovered from New Year’s Eve hangovers.
Listed for $375,000, the buyer offered $374,000 and didn’t ask for any closing costs or concessions. After the buyer’s inspection was complete only minor repairs were requested. There was no problem with the appraisal (it came back at $380,000). After repair costs of $21,277 my net profit was $30,197 (I say 40K in the video but the deal hadn’t closed yet so I didn’t have all the repair costs tallied up).
I’ll give the banks credit – they’re fixing up their properties with new carpet, paint and appliances. That makes them more desirable to retail homebuyers. At trustee’s sales homes are being sold for 85-90% of retail value. I’ve been shut out down there since last November.
On the other hand, I’ve closed two short sale deals in the last month and have another 30+ offers on others throughout the greater Phoenix metro area. As banks face political pressure to work with homeowners on short sales I believe the short sale may be the acquisition method of choice for fix and flip investors in Phoenix.