BiggerPockets

Real estate owned (REO) -- real estate owned by a bank, savings institution, government institution as the result of default by borrowers and subsequent foreclosure by the institution.

Investment Summary
Our current real estate downturn is the worst our nation has ever seen. Foreclosures are higher than they have ever been. Most houses are not being sold at the foreclosure auctions, resulting in them being returned to the banks. These REO homes sit accruing tax and insurance liabilities for the banks. Banks are desperate to get rid of them and sell these homes for pennies on the dollar. We have access to thousands of these properties at 5-10% of fair market value. In addition, we have multiple investment groups interested in buying these properties at 15-25% of fair market value (FMV).

Loan Summary
We currently are in need of a $5 million loan for a period of 2-3 years and are willing to collateralize this loan with an REO package we currently own as well as additional REO packages purchased during this period. The purpose of this loan is to utilize our direct relationships with servicing banks and their clearing houses to purchase additional REO properties which will then be sold via realtors and seminars, primarily.

Loan Collateral
The wholesale value of the REO properties to be used as collateral (at 25% of FMV) is $7.2 million, with a fair market value of $28.9 million. The purpose of the investment is to sell for a profit, and these properties will be sold. However, before they are sold, we will use the loan to purchase additional to further collateralize the $5 million loan, further reducing any risk on the part of the lender.

Initial Collateral Details
Currently of the 388 properties in the REO package to be used as collateral, 90 are under contract with a total sales price of $1,366,523. The properties are in the following locations.

106 Michigan
85 Ohio
32 Missouri
28 Illinois
27 Indiana
27 Wisconsin
11 Minnesota
9 Alabama
8 Pennsylvania
8 Mississippi
6 Kentucky
6 Texas
5 Oklahoma
4 Kansas
4 South Carolina
3 Arkansas
3 Colorado
2 Louisiana
2 Massachusetts
2 New York
2 Tennessee
2 West Virginia
1 California
1 Florida
1 Iowa
1 Maine
1 New Hampshire
1 New Jersey

The $5 million loan will be used to acquire a similar (or better) REO package that will further collateralize the loan. Keep in mind that as these properties are sold, additional packages will replace them as collateral.

Fees and Interest Schedule
The additional REO package will take 2-3 months to generate a clear title on each property and generate income within another 1-2 months. We are looking for a patient investor who can wait 3-6 months for payment, appreciating the fact that their money will be further utilized during this period to increase the loan's security.

Moving Forward
We move forward with confidence and as a show of good faith are willing to put both the properties we have purchased and any newly purchased properties on the line as additional security for this loan. This confidence is gained by experience and the knowledge that we have unique buying and selling relationships. We look forward to hearing what you have to offer and to the possibility of working with you as our lender.

If interested in a JV relatonship we are willing to collateralized the loan as stated and offer a 20% equity partner position for 2-3 years.

Interested parties please contact
Lynn Payne [REMOVED]