Wheelhouse Properties

REO Coversheet

I wanted to write quick post on REO offers.

Last Monday (eight days ago), I submitted 9 REO offers. The offers were simply on an Arizona REALTOR contract with the appropriate addendum's. I received two response/counters in a weeks time frame.

Yesterday, I submitted 9 REO offers. The offers were on the same contract, but this time I included a cover page that states the following:

For clarity, it is written from my realtor's point of view.

Please see attached offer for the property located at Insert Property Address. This contract contains the following:

Ø ALL CASH offer for the amount of $81782.00

Ø Earnest money of $2500.00 Ø 5 days inspection

Ø 15 day close

Ø No financing contingency

Ø Buyers bank statement showing proof of funds

Ø Copy of buyers escrow check

My client has made multiple offers on several properties. If another offer is accepted before this one, he still may chose to buy it with private or hard money. If that is the case, it will be disclosed to you as soon as possible.

If you have any questions for comments my contact information is below. I look forward to a successful close.

I received 4 responses within 24 hours, and two of the four were counters, one was a rejection, and one was "we need another form filled out". Bottomline is though you get faster responses. I have no other statistical data other than the cover letters makes it simple for them. They can see what is without sifting through 12 pages of contract.

If you do not use a cover letter, try it and see if you get quicker response times. Just food for thought.

Hard Money Ain't So Hard!

Last night I was browsing my local county website. During the last few weeks, I had noticed someone's name, that I won't mention, always pop up on comps that I was pulling. To be honest, I wanted to contact this person to ask them out for lunch or a beer to pick their brain.

I went on the county website and typed in their name and searched from Trustee's Deed. Low and behold they are a buying machine and recently started buying in 2009 at auction. By machine, this person is buying 5-10 properties per month. Someone buying that many has to be moving them pretty quickly.

So that got me thinking, and I entered their name into the deed of trust document search to see if they are buying with cash or hard money or private money. Low and behold, they are using numerous lenders. Some here in town, some in Utah, some in Oregon, they are all over the country. Then something catches my eye, all the deed of trusts have the same "When recorded, mail to: blah blah". They all had the same PO Box, everyone of them!

So, I type the PO box number and address into Google and a I FINALLY find the who it is and I get their phone number.

I call them today on my lunch break and this is how the conversation goes:

Him: Hello, this Steve

Me: Hi, My name is Justin and I'm a real estate investor in Arizona. I found your name on our county recorder site. Are you actively lending money?

Him: Yes we are. Do you have a property now or you are trying to line up financing?

Me: I'm trying to line it up. I buy at auctions and REO's. Do I need to qualify with you or is it based on the property?

Him: It is solely based on the property.

Me: What are your terms?

Him: The terms are pretty simple. 18% interest only, no prepayment penalty, no upfront payment, no points. Just monthly interest payments. We do charge a $900 processing fee per property though. Loan is based on the lowest comps in the neighborhood.

Me: This may sound like a stupid question, but do you run out of money? Do I need to be worried when I put in auction bids.

Him: Sometimes, if you are buying at auction, just give us a call in the morning to make sure we can fund you.

Me: What do you require me to put into the deal?

Him: 20-30%. On average its between 25-30% right now.

Me: Great, so I just call when I need you and thats it?

Him: Thats it.

Me: Great, you'll hear from me soon.

Him: Great, goodbye. Me: Goodbye.

There you have it. One of the simplest ways to find funding. Now go do it.

Search for Trustee's Deed. Find out who is actively buying.

Take their name and search for deed of trusts.

Record the mailing address of the lender and enter into Google.

Odds are they have a website and you can find their number.

Short Sale Calls From Homeowners

This week I received some interesting phone calls from my direct mailers that I send out. I will generally get between 5-10 calls a week and close on a few deals. This week was rather slow but the calls were interesting.

Once in a blue moon, I will get the angry call from a person stating that they are offended that I sent them a postcard mentioning foreclosure, because now everyone knows that they are in foreclosure. I tell them that it is public record and I'm hear to help, they usually do not respond well to that and I get a few swear words thrown my way. I eventually tell them I will take them off my mailing list, which does not mean anything since I only mail my postcard once. But, that quiets them down and they eventually stop harassing me.

The call I received yesterday was from a gentleman, who was a really nice guy. My postcard gave him "sticker shock" because he had no idea he was in pre-foreclosure and even called the bank to ask about it. The bank said they had not filed anything yet, but they were going to. Well, in fact the bank did file and they did not even know about it! Since he was trying to do a loan mod, he thought the bank would not go forward with foreclosure. So, I spoke with him a little about it because I could tell in his voice that he was very concerned about losing his home and wanted some help. He flat out told me he did not want to sell his house, which is generally when I end the conversation and move on but this guy was different.

So I took a few extra minutes out of my day, found the notice of trustee sale's for him and emailed it to him so he could see it with his own eyes. He followed up with me and wrote me a very nice email thanking me for taking the time to find it for him. He was very sincere in his email. I felt good about myself because even if I could not make money on the deal, I at least warned a good citizen who just had some bad luck due to the economy.

Anyways, he told me he works out his home office and keeps an eye out on the neighborhood. So a few hours later, he emails me back with a bunch of addresses in his neighborhood with phone numbers of vacant houses. His neighbor across the street has been trying to sell his house for months. He even walked across the street put a note on his neighbor’s door to call me about purchasing his house. All in all, I received 3-4 good leads from this gentleman. The only thing I did was a take a few extra moments out of my day to help him out. I'm not sure if I'll close on them, but you never know.

The moral of the story: When someone is generally in trouble and a good person give them a few extra moments and do a good deed. We live in a busy and sometimes ruthless world but you never know what dividends you receive.