Uploaded on Feb 23, 2009
I want to offer a few of my own ideas on the REO market.
1) Firstly, there is no such thing as "bank direct" bulk REOs. Banks do not have real estate departments designed to move large packages of homes. The banks have an exit/holding company that sells their REO packages for them to weed out the real buyers for them. Each lender has between 3-5 companies they outsource who do this for them. Due to SEC laws, these companies cannot legally publish their deals in the public forum. Either you know someone in one of these holding companies or you do not but there is no chance you would find them through an online search because that goes against their legal limitations. Unfortunately, most people desiring these properties have no such way of generating these contacts.
2) If you're buying exit/holding company direct, then you're paying a maximum of 30-35 cents on the dollar for a package or you're getting it somewhere else.
3) True exit companies sell whole pools of packages. There is no customizing your package. Customizing is only true if you are buying your REO packages on the retail market. Again if you've found a real seller and are purchasing at more than 30-35 cents on the dollar, your package is not holding/exit company direct. You get what they have for sale and if you do not like it, you reflect that in your bid. Because these are not listed in public forums, typical winning bids are in the 30-35 cents on the dollar range or even much less.
4) There is no such thing as a "tape". It is a made up broker word. Exit/holding companies produce deeds and keys to properties. You bid on the properties. Upon notification of a successful bid, you have one week or less to close. They give you the deeds and you do with them as you please. No where in there does a "tape" exchange hands.
5) For some reason most investors think CA and FL are the best areas. Because these have the highest retail levels of competition, they are actually the worst. As the saying goes "Buy low - Sell high". If you're looking for just CA or FL, you cannot buy low making them much lesser returns. True packages contain assortments of properties all over the country. Do not get sucked into the trap. In many ways, the best deal is anywhere you can get a great buy at, irrespective of that local market.
6) Lastly, if you are looking to exploit my holding company sources then we can work together. I do not in any way represent the company I work with, thus I am not bound by any of their legal limitations. The only way we can work together is if we do a JV. Most brokers are using your funds to shop as a retail level deal.
I have a private hard money lender who lend against our purchase as a blanket refinance AFTER purchase. Literally, you put up the funds have them back in less than 30 days. You are still able to benefit from the residual returns. In the meantime, your capital risk is non existent.
I work with a specialized company that will resell the entire package for us in less than 120 days. They simply offer retail pricing to other retail level investors. Without leveraging, our current clients are seeing their funds doubled in less than year. With leveraging, we can far exceed those returns. It's your choice.
Proof of funds statements, LOI, NCND and all the other broker agreements are not relevant for our transaction. Those agreements are sure signs you are dealing with a broker. You must be willing to move your real money into an escrow company of my choosing and sign a joint venture agreement. I recommend getting started with a smaller package in the $1-5 million dollar range to allow us to prove our worth as a company.
You can view a brief presentation on youtube at the link below:
Fihn & Associates
Toll Free: 1-877-837-2652 ex703
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