Deal In The Works

I ran across a bank REO last week which looks to be a real good deal. I won't go into much detail now as my agent hasn't submitted my offer yet. However, I will say that this particular property will probably end up being our personal residence instead of an investment property. My plan right now would be to get it under contract and then immediately sell or rent our current personal residence. Once we close on the new property, I would immediately do a cash-out refi. Then, we'd live in it for two years and sell for a substantial profit. Of course, a LOT of things need to go right for this deal to work. Right now, my wife isn't too thrilled about the house itself (as far as living in it).

My agent sent me comps and even at the low end this property will be a gem. It doesn't need ANY work from what I can see, but I would definitely make some cosmetic improvements over the two years to add more value (e.g., wood flooring, finish the wood fencing, add a roof to the patio).

The offer I submitted was pretty low and my agent initially balked at it, saying the bank would probably not even counter it (other than a total rejection). But I gave her a list of reasons for my low offer. Seriously, I doubt the bank would jump on the offer, but it's a starting point to start negotiations. I have a meeting with the loan officer today to go over my options. Having been in the military, I'm eligible for a 0-down VA loan, which right now is about 5.5%, but we'll see what works out best.