Reos And Wholesaling Is It Possible?
here is my delima I have a investor looking to buy 25 homes fixer uppers the prices he is looking for is between $10thousand and eighteen thousand.here in akron ohio there are plenty of properties on the mls that are bank owned that fit his criteria. my problem is how can I purchase these properties from a agent without putting up my money and then assign them to my buyer who is buying with cash. any suggestions? 
You have to put up some money for the earnest money. A real estate contract is not legal without earnest money.
I have never seen a REO contract that allows you to assign the contract. I would try to find properties that are not owned by banks to flip to your investor.
If the properties are listed for $10,000 and they have been listed for some time, offer them $500 or even $100. You never know, they might take your offer.
I'm not sure how it is in Ohio, but in really hot real estate markets, REOs can go pretty close to retail market value if you use the REO realtor (that commission comes right out of your profit).
The key is to call the lender directly and start making the right contacts in there. If you are looking to buy 25 REOs in a short timeframe, let them know that. Once you buy a few, they'll know you are serious and you may be able to negotiate the purchases from the bank without using the realtor, and below what the loan amount balance was.
Banks want their money back to loan out, not to sell and hold real estate. But the realtor they use will not recommend they take a 100-500 offer (as his commission will be based on that!). You might get lucky on one or two, but probably not on 25.
You may want to contact a couple of the larger banks you find (that have lots of REOs in your area) and tell them you want to buy 25 houses. If they have them, they'll cut a great deal on them to get rid of them all. You can have your buyer buy directly from teh bank and pay you a finder's fee in lieu of the realtor commission he would have paid.
Lots of ways to get creative, especially when you're backed by cash!
If you have an LLC, you can simply assign it to your buyer...as suggested by Steve Cook somewhere in this forum.
[addsig]
The Akron market is similiar to Pgh. However in order to wholesale REO properties you really need to do a shortsale with the bank. The Akron market is really strong for retailing.
Lori
[addsig]
have any one ever contacted the lenders other than shortsales and made deals on reos? :-?
Quote:
On 2004-10-25 23:29, shadow4 wrote:
have any one ever contacted the lenders other than shortsales and made deals on reos? :-?
Shadow, I'm afraid you got some incorrect advice. A short sale is a pre-foreclosure technique and does not apply to REOs. You should make an offer like you would with any other house and submit a lot of paper to support your claim. Here in TX, most banks aren't interested in giving a descent discount since they know someone will buy it at close to FMV.
-Chris
[addsig]
here is my problem. i used realtytrac and i found alot of houses in my area (raleigh durham) but when i called the banks to negotiate they would send me to a realtor who could not do anything because it wasnt on the msl. so are there a list of banks that are good to negotiate with or a way i can get around this? :-?
Maybe I confused you. If the property is already been through foreclosure and the bank owns it. The properties seem more likely a retail deal. In order to wholesale the properties you would have to do a shortsale before the bank owns it.
LORI
[addsig]
My plan is to do a double closing...any objections???
[addsig]
First,
You do not have to use the state specific realtors contract. You can use your own and some REO companies prefer an investor contract as it is straight forward and simple. You cna use any contract hat you want and simply add "and or assigns" in the appropriate area. YOu can do a double closing etc. so you don't have to come up with out of pocket $$. I am doing one on the 10th.
[addsig]
Hey,
To answer your question literally, yes you could wholesale REOs (using double closings, or whatever). Most things are possible.
It would be possble for me to, one day, run a 3 minute mile and marry a supermodel, but I would not bet a whole lot of money on it.
The answer to your question is...it would be very hard to wholesale REO (regardless of how you define wholesale). You could spend YEARS trying to find ONE REO that would work as wholesale property. "Even a blind chicken finds corn once and a while" is the expression that comes to mind.
REO can be a very good source of houses for rentals or retail.
I also disagree that REO will accept non standard contracts or "or assigned". It is possible that you might run across one or two, but you can not build a business on this premise.
Generally, buying an REO requires pages and pages of paperwork and contracts.