Inside Real Estate Investing
Posts tagged as:
Offering the lure of cheap government-guaranteed financing, the Federal Deposit Insurance Corporation moved to push its efforts to have private investors buy distressed mortgages from troubled banks. Agency officials announced that they had reached a deal to sell $1.3 billion in mortgages from Franklin Bank, a Houston-based lender that failed last November and was taken over by the F.D.I.C.
{ 0 comments }
There is a lot of chatter about buying REOs and foreclosures, making a fortune in real estate, and getting rich quick. A lot of big promises and under-developed plans. How do you protect yourself? Where should you put your money? What type of properties should you invest in? What should your exit strategy be? There is one program that addresses all of these concerns offering a safe, secure and steady cash flow opportunity with a solid exit strategy. It’s called contract for deed property programs. These programs offer affordable entry level prices for under $35,000; guaranteed monthly cash flow; no rehabbing; ancillary services such as sales and marketing, doc prep, inspections, property management and refinance services; and most importantly; 50% to 60% ROI or more. Let’s look more closely how this program work.
{ 3 comments }
Your a rep whose been working the phones trying to connect with sellers of large portfolios of REO assets. Your aggressive, your smart, your hip and your efforts are about to pay off. A seller finally agrees to let you represent a small pool they own. Congrats! Now what? You have buyers but have yet to sell anything and not entirely sure what the next steps should be. No problem. Let’s walk you through the steps to wealth, glory and fame (okay, maybe just the wealth part).
{ 0 comments }
You received a tape of REO properties. You’ve done an initial review and like what you see. The location is fine and the price is in line with your expectations. Now comes the time to make an offer to purchase. Depending on the types of deeds being conveyed will determine the purchasing process. Here’s a guideline of what you can expect.
{ 0 comments }
Everyone wants to be direct to the bank when buying. Who wouldn’t. You get the best deals. You negotiate directly with the bank asset manager. Properties are free and clear and you close quickly. This is what most buyers would like to hear but the reality is much different. Unless you are a large hedge fund with deep pockets and even deeper long standing relationships with banks, you will be sorely disappointed. So how does one actually buy directly from the bank. You have three choices.
{ 0 comments }
As I have mentioned in earlier postings, I am often perplexed at the amount of requests received from buyers or their reps seeking REO packages with very specific requirements. Some are so specific, that even if I had the capability to compile, most are impossible to fill. Most sellers will stay away from filling any order, even if you can proof funds for a billion. Here’s why.
{ 1 comment }
Buyers hate to bid. They want to know the price. Even when the do, a buyer will still submit an offer below the posted price. There are many reasons why buyers do this. They don’t agree with the seller’s BPO’s; their due diligence discovers the FMV is less than what the seller states; the properties are in poorer condition; perceived market fluctuations and the list goes on. One way to resolve these issues is to put it out for bid without any pricing. No! Not a bid! Why when sellers decide to put out a package for bid, buyers get revolt? Fixed price gives a buyer more control but a bid price, well, that puts the control squarely back in the seller’s hands and buyers don’t like. Believe it or not, there are more opportunities to buy via a bid then a fixed price.
{ 2 comments }
When a “seller” wants to make their profit on a spread (the difference between two prices), they do so through a pass through transaction. Simply put, a reseller has a contract with a principal seller at one price than attempts to resell it to an exit buyer at a higher price. In a nutshell, the transaction simply passes from the principal seller through the reseller to the exit buyer with all reps and warranties conveyed. Here’s how it works.
{ 2 comments }
BPO is an acronym for Broker’s Price Opinion. In general, the term Broker’s Price Opinion (BPO) is a method that a Real Estate Broker uses to estimate the value of a property. With each package of properties, the BPO price is usually listed but understand, these BPO’s are very subjective and not an exact science.
{ 2 comments }
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.
{ 2 comments }
