House 1, Offer 1

I found a house that, at first, looked like a good one. It's a 2 bedroom, 1,200 square foot house that was a foreclosure that no one bought at auction, so it went back to the bank. The amount of the defaulted loan was $125,000. Apparently the loan was a VA backed loan, so the bank has since transferred the property to the Veteran's Administration. The house was sold twice before, but I talked to the listing agent last week and he tells me it fell out of escrow on Friday because the buyer's loan didn't come through. It's back on the market today. The listing price is $147,000. I figure comps are $160,000. The listing agent told me it sold last time for $152,000 and he expects it to go higher this time. Someone was already in doing some work on the place - looks like they did some drywall patching.

I had hoped to come in with an all cash bid, 15 day escrow, and a low price. Because this is being sold by the VA, I don't think those first two things will be as strong a positive as they would be if a person or bank was selling the home. I was also hoping to be the first bidder once it came back on the market and maybe get my offer accepted quickly, but it seems government sales work by opening a bidding period and accepting all bids until the end of the period, then selecting the highest bid. In this case, the period ends February 7th. So much for the plan of getting it quickly. There's no way I'm going to offer close to full price, but I'm going to submit a bid anyway. The agent tells me that cash bids require a letter from my bank stating I have the funds, so I'll work on getting that today. Based on what the agent tells me, I don't expect to get this property. This might be a good property to rent out, but for flipping, I don't think I can get it low enough to make it worthwhile.