I was just informed my HUD offer was "not considered" due to another offer being higher. I had really hoped I would get this property as it had a nice profit margin, but I guess someone else thought so, too. That makes a total of 5 offers through my RE agent, with 3 being shot down, and 2 still outstanding. Oh well, each 'no' is one step closer to a 'yes'. ;-)
I figure the 6 offers I spoke about in the previous entry may all get shot down as well. But it's all a numbers game. I submit offers that work for me, and if they don't work then it's on to the next one.
My gut feeling is that the majority of these homes are in pretty good condition, meaning $1k in repairs or less. These are probably the ones the RE agencies are all harvesting. They buy at almost retail and resell for a slim profit. They don't have to worry about margins as much since they ARE the broker/agent. They probably even have worked out good rates on financing, so they can bid even higher. I figure the only way I'll get one of these properties is if it is in terrible shape. The RE agencies want a quick turnaround, and don't want to waste time and money on repairing the properties. I guess I'll focus more on those and less on the low-maintenance types.
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I was informed by my RE agent that the HUD property was purchased for $129,500 from another local investor. My gut feeling is that he will resell FSBO, thereby, eliminating the backend 5-6% commission fees. He may also have a buyer already lined-up, but it's hard to tell. While I could have offered that price, my profit margin would have been very low - if any at all. I just have to offer what works for me.
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