ballgum: if the numbers don't make sense before the deal, the really wont much after the deal either. you can always opt out of the contract and loose the $100 option money, best money you will have spent. Buying the house at right price is the best investment deal or mistake you can make, so be patient. You may not be buying houses everyday, but you have to search for them everyday to get the best deal.
As 50%homes said 20-50% off FMV, now 50% off is gonna be pretty hard to find specially in REO's, almost impossible. You really do have to watch for price drop for REO's and then make a discounted offer on it to get the best price. Also IMO Fannie/Freddie don't really discount their properties that much and don't accept much below asking price. Other banks are better option, but you have to work with realtors that list for REO's, and they can be painfully slow. Most investor have access to MLS through friends or else, but in Houston even if you don't have access to MLS you can still search for foreclosures through
www.har.com and that way you can search on daily basis.
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