We Are Acquiring A REO Next Week, What Is The Best Way To Unload It Quickly...
I really would like to turn this property fast so we can use the money to buy another property but with all these seasoning issues will it be hard to do?
What exactly happens with wholesaling, can it be used with REO's?
Quinn
It pretty well depends on how good a deal you got when you bought the property from the REO.
An Example. The True Market Price of the Property is $230,000. You bought the property for $200,000 and have a $190,000 lst loan. Your downpayment was $10,000 and the REO paid all costs of escrow and loan fees.
You sell the property for $230,000. The new Buyer puts a downpayment of $40,000. You pay all escrow,title and transfer fees etc. You recapture your $10,000 downpayment and from the remaining $30,000 you deduct your costs of this last sale and you end up with a profit of about $25,000. Your new Buyer assumes the lst TD.
The REO will probably like the deal in view of the good downpayment.
Of course you can always structure the deal if the buyer does not have that large of a downpayment. You can increase the sales price and take back a second. In view of the increased salesprice you can then sell the second to an investor at some discount and thus gain a profit.
I am sure you can come up with a few variations on this transaction. But you see how it is done.
Hope this helps. Lucius
Seasoning is really just for FHA and VA loans, although most lenders act otherwise.
To avoid seasoning issues I have hooked up with a smaller local bank that does not sell the loans. They need no seasoning and will even do an 80% LTV after rehab so I can get cash out.
Send your buyer to the smaller bank and you should be good to go.
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Hope this Helps!
Bill[ Edited by telemon on Date 01/24/2004 ]
telemon
what type of credit does this bank require?
do they do "STATED" loan on equity only?
Are you trying to sell it to an investor or a owner-occupied buyer?
Do you have qualified buyers set up?
The issues will be on the borrower not on you for seasoning.
The problem with going to a smaller bank is that they hold their loans. Which means they are limited withthe programs they have to offer.
that is why I became I broker, so I could offer everybody that wants to buy my house a program. Because they are 100's of programs on each level of criteria that is needed for a loan.
good luck
lori
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Quinn,
How did you get your REO: bank or other instituition?Just curious about the steps you went through to get and the difficulty level.
Thanks!!
Chris G
Is it possible to wholesale flip REO's? If so whats the difference between wholesaling REO's and wholesaling regular houses like FSBO for instance. If the REO is being sold through a institution other than a bank, can you get it under a purchase agreement and the assign it to a rehabber?
Lori, do you put together loan packages for buyers of your own houses?
It sounded like you do.
If that is the case then how does the lender feel about the transaction when they find you on the HUD 1 as the seller?
Any problems getting the loan through with your lenders?
Tom
Hi Chris(Sharp)
I found my REO through a realtor I've been with. The bank wanted 65k for it we offered 57k but they countered at 60k and said they would go no lower so we accepted. The house is in great shape, just need some cosmetics and thats it. The process really wasn't that difficult, the offer process took less than 2 days. The thing that took so long was getting our financing.
If you have any more questions please feel free to ask
Quinn
You paid 60K for the house, what is the FMV? Say it is 85K...if you really want to sell it fast do the following.
Talk to your realtor and tell him you'd like to sell it quickly. List it for 82,900 (2,100 below market value to increase sellablity). When the offers start coming in accept the best one. Even if you only get 80K you still make 20K (probably more like 15K once you subtract expenses).
Good luck and let us know how it turns out.
Q
I'm pretty new to all of this, but am interested in REOs. How did you finally get the financing for this property? Can you recomend a good lender?
The property appraised for 87k but once we do our little repairs, especially fixing the garage, it will appraise for a little higher.
As far as the financing goes, our broker is still working on that now. We were supposed to close today but we had to postpone it to provide proof the EMD actually was provided and that the check cleared. I've never heard of that being a condition for the lender before. Has anyone else heard of this before?
Quinn
Quote:
On 2004-01-29 13:56, tbelknap wrote:
Lori, do you put together loan packages for buyers of your own houses?
It sounded like you do.
If that is the case then how does the lender feel about the transaction when they find you on the HUD 1 as the seller?
Any problems getting the loan through with your lenders?
Tom
I am not allowed to do that. I wholesale people to do that also.
Lori
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Quote:
On 2004-01-30 20:52, quinn wrote:
The property appraised for 87k but once we do our little repairs, especially fixing the garage, it will appraise for a little higher.
As far as the financing goes, our broker is still working on that now. We were supposed to close today but we had to postpone it to provide proof the EMD actually was provided and that the check cleared. I've never heard of that being a condition for the lender before. Has anyone else heard of this before?
Quinn
No I have never heard of that before. I have flipped alot of properties in MI.
Lori
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