Whenever I speak to an investor for the first time, I am always asked two key questions. First, am I direct to the seller and second, do I compile? The answer to the first question is yes but the answer to second question is no. There are many reasons why but the most important one is that unless you have a billion dollars, are an ex-banker with an extensive relationship to banks over a 20 year period, none of the banks or sellers will compile for you. This, of course, is a bit of an exaggeration but highlights the challenges of compiling.
Here are some more realistic reasons:
1. You have no relationship with the seller.
2. You have never traded with a seller.
3. You have no history of trading with any seller.
Why would a seller spend time compiling for a buyer they do not even know? Even if a seller agreed to compile for a new buyer with deep pockets, the buyer’s requirements become so unrealistic that it is often impossible to fill the trade. Buyer wants single family residential 3/2 units in a certain city, in a specific zip code, with FMV between $150K and $200K with no houses older than 10 years.
Even if the seller could fill the order, the buyer’s usually ask for replacements for properties they don’t like. This takes a lot of time and effort all for a buyer that has no track record regardless of how much they have proofed funds for.
In the end, the trade usually does not happen unless the buyer agrees to take the good with the bad, which they rarely do. The buyer is seeking the perfect risk free package and it does not exist.
So the next time someone tells you they compile, I would tell them to put away the crack pipe.
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What does it mean to compile?
Hello Vincent,
The definition of compiling is to have a seller provide a customized package specific to the buyer’s request. For example, a buyer seeks to purchase bulk REO package of up to $10M in only San Diego specific zip codes, residential single family residences retailing from $250K – $350K with zero to light rehab paying no more than .65%. This is a customized order or in other words, compiling.