REO Roadblocks, Detors & Directions ?

Hello...I posted this 3 weeks ago .....Hello

Please Respond

Please Reply

Hey AA213,

Just saw this post and was curious because I just spoke with a coach on the Advisory line about REOs.

Just to clarify, these are statements that you say are often encountered but are not absolute definites? That's what I would say, because if you build a personal relationship with a bank, they may be willing to play the game on your terms because, in the long run, it means a property comes off their books. I'd say that a bank should be a member of your power team, just the same as an agent, attorney, broker, contractor, etc.

Vincent

To address your questions/issues.

1) Most banks will not entertain any offers other than through the REO listing agent. The exception would be your smaller local banks and only then if you have a relationship or rapport with them. I have actually taken property off their hands with financing and tenants in place.

2) Listing agent or your agent. That's my experience.

3) Most banks have a clause in their contract/addendum that states the contract is not assignable. The only bank I have ever bought from that doesn't have this clause is HSBC. Ask the listing agent for a copy of the lender's addendum for your review. The clause is usually close to the top. I have gotten lenders to allow another buyer to enter onto the contract with me as a co-buyer. This would have to be done on an addendum and approved by the lender.

4) All require a "proof of funds" if paying cash. A bank or stock account statement etc. A lender's approval letter is required if using financing. Hard money lenders are an option for poor credit. There are also transactional funding guys out there that will provide funding and a proof of funds letter. This gets a little tricky because you have to have your buyer lined up and ready to close at the same time that you close (a to b and b to c). This is a double or simultaneous closing. The transactional funding is provided for all of about 5 minutes and it usually costs about 2%. You could also search out some private money guys. Every investor should have one...or ten.

Hope this helps

Thanks. I will try harder to get the local banks etc.. to work with me as part of me team

Thanks. The problem also facing me is that i am trying to get control of these properties with no money due to poor credit.

The transactional funders idea is hampered because these properties are listed on the MLS by a Realtor/Agent and I cannot represent them to a buyer without controlling them by having a contract in place.

Without a buyer n place there is NO transactional funding.

As for Hard-Money....The lenders I find are only lending 70-75% of sale price,and not on the equity no matter the existing amount; and some even have minimuns of 100,000.
(but will do a blanket loan of multiple properties to add up to the 100,000 or more)
With this I fall short $25-30,000.

Do you know of any "Friendly" hard money lenders that will do 100% considering the equity without any of my money ?

I did find a hard and transitional funder that will or may depending on the equity but in some cases they require a credit check and some colladeral.

This would work BUT you have to join their network and buy a set of instructional CDs. This is a little too costly for me at this time and given the fact that there are NO GUARNTEES to close or get ANY funding or the rates that they will charge you. Thats a little scary.

any ideas ???????????????????

AA213,

You need to find a hard money lender who will loan to you based on the ARV, or After-Repair Value, of the house. This way, if the house would be worth $100K after any repairs (ideally only paint/carpet), you can offer $75K, and thus the lander would be financing 75% of the ARV, but 100% of your needed money for the sale! Hope this helps!

Vincent

Yes ,Believe me , I`ve tried.I found a 3/2 in livable/rental condition.
Its a REO at $35000 asking price.
ARV is 70-75,000.
Repair/Update is under 10,000
NO lender will touch it without money down; unable to lock it into contract to pass along to my buyers.
lenders will not lend 100% on purchase price OR ARV.
Most lenders want 25-30% of purchase price down.
What-2-Do ???
u-know any lenders that lend on ARV alone or.... ?
Thanks,
Adam

Don't give up. Keep searching for private money. tell everyone you know that you are an investor and what you are doing let them know that they can make as little as 9% by investing with you. What is your exit strategy?? do you have buyers?
Start attending REIA meetings you will find money there.
Good Luck and Keep us posted

Thanks,I have spent many many hours researching all types of lenders and types of loans. I have buyers BUT its always unknown if they will make an offer that is suitable to any property I may have(once I am able to tie it down into contract).
Exit strategy is after getting contract with a 15-30 day time period to inspect & appraise and before submitting and earnest money or down dayment; I will then start to advertise it to my buyers. If i cannot find a buyer within that time period to assign contract to,I will just have to walk away.
I am only looking to assign or bird-dog at this time.
Adam

I think you should be marketing the property to your buyers now. If you could get atleast one buyer interested you could have the option of doing a double close.Or if you know someone with cash or able to finance they could get a nice 9% return on their money in a few days.
Another way...this may be more attractive to them...split the profits with them 50/50 half of something is allways better then all of nothing. hope i helped somehow. good luck on ur deal..let us know how its going

"Do you have an IRA or other investment capital not getting you a high rate of return, safely?" Ask everyone you come in contact with everywhere. I asked a 73 year old women driving the shuttle for a car dealership this morning. Guess what, she has money that she uses for investment. She's getting around 2%. I told her that I pay between 8-10% depending on the term. She is considering it. Before 8:30 this morning I didn't know her from Adam's cat, now I may have a new source for inventment. You never know when or from where you might find your next funding source. Just as everyone you meet. Just don't advertise to the general public, which is against the law, but if your make individual contacts and ask you are fine. The average person with investment money doesn't know about percentages or credit reports or much of anything, but when they see their investment money returned in a month to a year and at a much higher rate, they won't care about any of that. They will just want you to do it again. Go for it! As everyone.

Adam, I am the having same problem finding a friendly Hml. I think this the hardest part, finding funds for great deals. When I find one I will let you know.

Mike

Thanks Mike...If I find one ,Ill let you know

Well , NO IRA !
I do not know of anyone that has money in anything like that; That may consider ME to invest their funds even at a 20 % return. I just do not know them.

As far as asking a stranger or an acquaintances could turn out to be a hazardous situation here in my town.
Someone would probably report me out of fear that I was trying to scam them or take advantage of them.I would personally be afraid of being dragged down to the police station for questioning.

I am an honest, low-key guy that stays out of trouble and would not like to be a story on the 6-0-clock News !

Anyhow, Your ideas are always welcomed and I thank you and all the DG family who take their time to respond and share.