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Bulk Reo’s

This topic contains 11 replies, has 0 voices, and was last updated by Avatar of nusteem Gary Hawes 10 years, 10 months ago.

Viewing 13 posts - 1 through 13 (of 13 total)
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  • #5322
    Avatar of nusteem
    Gary Hawes
    Member

    I am not the Broker but the “gate keeper” to the owner of this REO bulk list.

    These are properties scatered throughout the US. A package of 305 homes that can be split. There is a package of 60 homes in FLA currently in a trust.

    I am fairly new to this EHT situation. Any ideas are welcome to me.

    thanks,

    Gary

    #27879
    Avatar of homesavers
    NULL
    Member

    You need cash to make these deals happen. I have a source that buys REO packages. You have to make sure you are dealing with the principal. To many people out there trying to shop deals with no contract. If you are in contract with the principal then I can get you in touch with the Buyer. I am not direct to the buyer myself but I know someone that is.

    #27880

    @homesavers wrote:

    You need cash to make these deals happen.

    That is correct. With REOs someone has to acually purchase these from the bank first before the EHTrust or any other method can be used. The issue it creates is that who ever or what ever purchases these now has a seasoning issue and will not be able to remarket them in a traditional sence for up to 1 year.

    Typically those who buy REOs know that they will just have to rent them or do a seller carry scenario for a time until such time they can sell or refinance them. That’s not necessarily a bad thing except that it required lots of their own money or Hard Money with high interest rates.

    Of course, if you can purchase “tapes” (blocks of REOs) at .10 to .40 on the dollar, the monthly payments on them is going to be very low, even wiht a high Hard Money rate. If you use your own credit to purchase just one or even a few, not only will you be extending and risking your credit but you will also have a large downpayment to make since they will all have to be Non-Owner Occupied. And, if you are only purchasing one or a few, you will not get such a big discount.

    I prefer to get them before they go to the bank. Like I’ve said, there are plenty of properties out there that can be picked up for .50 on the dollar before they go back to the bank using the Long Term EHTrust of the Short Term EHTFlip method.

    #27881
    Avatar of gshepherd
    gshepherd
    Member

    @nusteem wrote:

    I am not the Broker but the “gate keeper” to the owner of this REO bulk list.

    These are properties scatered throughout the US. A package of 305 homes that can be split. There is a package of 60 homes in FLA currently in a trust.

    I am fairly new to this EHT situation. Any ideas are welcome to me.

    thanks,

    Gary

    This won’t be a EHT solution (I’m surprised this thread is still alive!) it will be a cash solution!

    I’ll have to clarify what you mean by “owner of the list”, however, if you have Texas properties still available drop me a line and what you require in order for me to see the list of Texas properties.
    Greg S
    469 688 4804

    #27882

    @gshepherd wrote:

    This won’t be a EHT solution (I’m surprised this thread is still alive!) it will be a cash solution!

    Please tell me how or why this ISN’T an EHTrust Solution. I wouldn’t do it any other way. Sure, its going to take cash, but how is he going to protect his position and profit? I agree, an “Option” would work too but requires more disclosure and a payoff of the Option outside of and before an actual closing of the sale.

    Until just a few days ago I believed that banks etc would not place their REOs “in trust” prior to a sale to an End Buyer. Well, I may have been wrong. I’ve been contacted by a Bank’s RE Attorney to see if I might be able to help them move some REOs for them using the EHTrust/REAP/CAPP senario. I let you all know how the negotiations go.

    #27883
    Avatar of gshepherd
    gshepherd
    Member

    If you know more (Geez what do I mean “if”!!!) I am all for learning. My limit of buying REO’s was for cash and the investor(s) were not bothered about a Trust. I was. Yes, after the closing they could put them in trusts, but they were not my properties.

    I am direct to REO departments of 3 banks, one is a major lender so I am interested in having properties in a trust **before** closing. I will be interested in your negotiations.

    In the meantime I await “Nusteem”‘s tape.

    GS

    #27884
    Avatar of rick
    rick
    Participant

    I was talking with a lady from Arizona a couple of weeks ago. She was looking at one of my NEO’s and she started talking about a house that she owned for several years. I asked what type of a loan she had on it. She said it was a VA loan she took over from another veteran that was moving out of the area because of a transfer. She said the VA put the house title into a land trust and she paid a trustee the payments every month. I then expalined how our system works and she said that is exactly how the VA did it. Wow.
    I haven’t had a chance to follow up, however it might be good ammunition for the banks if we can find out more infomation on the VA program.

    #27885

    @Rick wrote:

    I was talking with a lady from Arizona a couple of weeks ago. She was looking at one of my NEO’s and she started talking about a house that she owned for several years. I asked what type of a loan she had on it. She said it was a VA loan she took over from another veteran that was moving out of the area because of a transfer. She said the VA put the house title into a land trust and she paid a trustee the payments every month. I then expalined how our system works and she said that is exactly how the VA did it. Wow.
    I haven’t had a chance to follow up, however it might be good ammunition for the banks if we can find out more infomation on the VA program.

    Rick, your friend is right. A VA Loan is the only Mortgage that right in the Note actually gives permission and suggests that if you can’t sell outright that you can do a Lease Option without any further permission from the VA. The individual lender must honor that Note and some have now discovered that they can do a Lease Option using an EHTrust and reduce their risk. In otherwords, they can evict instead of foreclose if needed. Plus all the other benefits an EHTrust offers.

    It doesn’t matter if it is a Straight Lease Option or an EHTrust, the original Mortgagee is still ultimately liable for the loan if it goes bad. And, they cannot get another VA Loan until that one is eventually financed in someone elses name. In other words, purchased and retire the existing note.

    #27886
    Avatar of dmclaen
    dmclaen
    Member

    Nusteem,

    Do you have direct access to other bulk packages, REO, NPN, PN, etc?

    Let me know.

    Daniel McLaen

    #27887
    Avatar of homesavers
    NULL
    Member

    I am 2nd or 3rd in line with a large bulk REO package buyer. These deals never go through. These are all Principal to Principal deals. Has anybody ever closed on an REO package? I don’t think so. You are wasting your time with them. Just ask Jim P.

    #27888

    @homesavers wrote:

    I am 2nd or 3rd in line with a large bulk REO package buyer. These deals never go through. These are all Principal to Principal deals. Has anybody ever closed on an REO package? I don’t think so. You are wasting your time with them. Just ask Jim P.

    You are correct. Very few of these bulk REO packages go through. Just today I had guy walk in my office with two “tapes” (REO packages/bundles of properties. In one pachage it has 8 properties for a total package purchase price of $68,200. Each property has a average value of $94,000. Of course this seems like a wonderful deal for someone who has $68,200.

    These properties are in highly distressed areas like Detroit, Pontiac, etc. Most need work and are not occupiable. Most will require $5000 to $10,000 just to be abl to rent them out. However, if you had another $100,000 to emprove each one and market them, they would make awesome rentals and offer huge cash flow and equity. These would be, after “fix up”, incredible EHTrust properties.

    The other one presented to me is 30 homes for $301,000 and in the same areas and conditions as the first package.

    Yes, these were also brought to me by a third party, probably four time removed from the original source. Which means if I were dealing with the bank that holds these directly the packages would be even less. But at these prices, who cares IF YOU HAVE THE FUNDS to do as I described.

    So what if all the NARS Members got together and put up say $68,000 plus another $80,000 fix up and repairs and marketing ($140,000) and purchased this first package? With each one valued currently at $90,000 or so and our cost at $20,000 and no payments, our cash flows and equity would be out of site. We can put our RBs on excelleated credit enhancement systems that would allow them to purchase in 12 to 18 months with an FHA Loan.

    Let me hear your thoughts!

    #27889
    Avatar of mark_azevedo
    mark_azevedo
    Participant

    My question is the same as it has always been, show me someone who has actually CLOSED one of these transactions. The only thing there isn’t a shortage of in the bulk REO market is HYPE.

    It isn’t played the way it is portrayed on the Internet. Real players will never have bothered with silly forms like Non-Circumvention, Non-Disclosure (NCND), Letters of Intent (LOI), Master Fee Agreements (MFA).

    I knew a someone who was in tight with a Wall Street law firm that dealt with the buying and selling of securitized note pools. They were considering moving into this area but it never happened. My friend who if anyone would have had a slice only made $15K the entire time on some builder closeouts.

    Ask yourself why would anyone involve an unlicensed person in such transactions? And if you are talking about the exchange of millions of dollars, can you imagine it actually taking place with a few forms and some phone calls? The real players meet face to face and do a LOT of due diligence.

    When you hear numbers on the Net about people having access to millions up to multi-billions in REOs, my advice is RUN away. You are dealing with a “joker broker” only they likely do not know it.

    All you have to do is look at the news to see the volumes being batted around on the Net are WAY over inflated against the reality.

    And in case you are wondering, yes I played in the market for a time last year and it was nothing but a waste. My business group was supposedly connected like you couldn’t believe with new sources of REOs coming online daily. Zero, zilch, nada, zip.

    I had the good fortune of stumbling onto a financials discussion forum where it turns out some of the big boys posted. I ended speaking with a trader in Singapore that dealt in the primary markets (this guy created bond deals, fuels deals, etc). He warned that this was all a bunch of baloney and it would die down (you had to read between the lines). He was right. Now if only I had read faster and taken said advice instead of trying to succeed for another couple months after that. Oye!

    Talk about cognitive rigidity!

    If you are going to play the game, you should at least know the score going in so you can base you decisions properly.

    Anyone want to buy a couple web properties that rank for the terms “bulk reo” and “reo bulk packages”? LOL!

    - Mark.

    #27890

    Scott,

    I sent some “thoughts” to your FinancialFitness e-mail, if you still use it.

    I wanted to see if it is comprehensible, before we can see if it is doable !!

    You know me.

    The babbling format of one of my other suggestions, if nothing else, protected me and the world from them !

    Thanks for your continued ‘deciphering’ efforts.

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