Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
17y
You can get a letter from a transactional funding source before you make your offer, so you can submit it with your offer.
Regarding the earnest deposit, yes, you are going to need to come up with the deposit shortly after the offer is accepted. It's highly unlikely that you are going to get 10 offers accepted at once, unless you are offering too much. If that were to happen, and you couldn't come up with the money for the deposits, you could explain to the realtor(s) that you no longer wish to move forward with the deal because you got another offer accepted. They won't be too happy with you, but it's an option.
If you are still worried about it, just make one offer at a time.
Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
18y
I am flipping REOs successfully in Tampa. I have 3 closing this month, and possibly a fourth.
I am doing simultaneous closes with my buyer...meaning, my title company is using the funds from the end buyer to fund both transactions (the sale between me and the bank, and the sale between me and my end buyer). This way, I do not have to bring any money to the table.
Once you start closing deals with some of the REO agents, and they see you are a serious investor who actually closes, things become a little easier. It also helps to make your offers as clean as possible (no financing or inspection contingencies), and be able to close fast.
Residential Real Estate Agent · Montgomery, AL · Member since 2008 · 11 posts · 0 votes
18y
I am a realtor in Montgomery, AL and I have seen several REO properties bought and flipped for a profit in this area. My company has flipped a few over the past year. The trick is knowing your budget before you make the offer to purchase and being able to turn it around quickly.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
18y
The addendums I've had to sign for REOs do not allow assignment of contract. The only method I see to "wholesale" REOs is to do a double closing. I'll be doing one in a month. Not a double closing though. I'm doing a pretty straight flip on this one - purchasing, closing and paying outright and everything then reselling.
Hard Money Lender · Bellingham, WA · Member since 2008 · 22 posts · 1 vote
18y
Are you guys finding that the banks require you to use there title company to close the deal? Have there been any trouble with them allowing you to double close the deal?
Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
18y
Jon,
Yes, it is done at 2 separate title companies. The bank's title companies are usually in another city, so they email all the docs to me, and then I forward them to my title company here, and we do both closings at my title company. They then wire the funds back to the bank's title company as well as FedEx the docs back to them. They call it a "courtesy closing."
Andre-
I am getting my deals off of the mls. There are so many REOs listed right now, it's not that hard to get a good deal if you are making offers consistently.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y
I too buy REOs off the MLS. I've not found any other way to buy them. Even if you go to the banks REO web sites (list here, by the way), everything shown will be listed. I'm sure some people have direct contacts with banks, esp., smaller ones, but I've not managed to get that "in".
Interesting approach to the double closing. Think it would work if both title companies were local?
Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
18y
I've been working on building relationships with some of the big REO agents here, and it is starting to pay off. It takes awhile, but once you close a few deals with them, they are a lot more willing to work with you and push your offers through.
As far as the double closing goes- I don't see why it would be any different if they were both local. It's worth a shot, anyway..
Flipper/Rehabber · WEST HEMPSTEAD, NY · Member since 2009 · 119 posts · 10 votes
17y
That helped alittle me just starting off i wuold like to make multiple offers because i have funding for the offers would that help with reo listing agents really want to work with you and if i want to do reo flips in other states how would i go about setting things up?
Real Estate Investor · Chandler, AZ · Member since 2009 · 12 posts · 6 votes
17y
Generally speaking, the banks are not willing to take assignments. The reason is quite simple... they aren't going to bank their money on a third party without skin in the game getting a buyer - while at the same time they cannot sell it to anyone else.
The way to do it if you don't have your own capital/financing to acquire it, or don't want to use it, is like Stephani said, double close. If you need a referral for lenders doing this in most states let me know.
I know many people who are using double close as we speak with great success. It is a lot easier than you think if you have a solid buyer lined up.
Real Estate Investor · Burlington, NJ · Member since 2009 · 4 posts · 1 vote
17y
"Yes, it is done at 2 separate title companies. The bank's title companies are usually in another city, so they email all the docs to me, and then I forward them to my title company here, and we do both closings at my title company. They then wire the funds back to the bank's title company as well as FedEx the docs back to them. They call it a "courtesy closing."
Stephani, just wanted to thank you for your Advice on this topic.. im going to try to do my 1st REO flip.. i was wondering how the title company setup worked.
Real quick do i ask my title company for "courtesy closing" or do they know what i want to do when i tell them i want a "double closing"
Real Estate Investor · Lincoln, CA · Member since 2009 · 28 posts · 1 vote
17y
Originally posted by Stephani:
Jon,
Yes, it is done at 2 separate title companies. The bank's title companies are usually in another city, so they email all the docs to me, and then I forward them to my title company here, and we do both closings at my title company. They then wire the funds back to the bank's title company as well as FedEx the docs back to them. They call it a "courtesy closing"
Stephani or Jon,
i just got off the phone with a title company here and i believe i can do that here as well. She explained it as Jon asked. Basically the end buyer (other investor) is your private money lender for "x" dollars and you close and then its reconveyed or something like that to him if say you want $10,000 out of the deal, he pays you off and takes the property. Maybe someone can clear this up a little while i wait for the escrow agent to answer the email.
OR if they are out of area title company and do email the DOCs to me to use at my wn title company, i understand this now and can have my own agent do all the closing FOR their company... Im going to ask her. Can someone help me with the reconvey thing?
Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
17y
Hi Vanessa,
I've never heard it explained that way, but I guess that makes sense, since you are essentially using your buyer's funds to fund your deal with the bank.
If you have a title company who has done these before, then you should be good to go.
I wanted to clarify that the bank's title company will be emailing everything to your agent, so just be sure to tell your agent that you wish to sign everything at YOUR title company and ask for all of the closing docs and wiring instructions be sent to your contact at your title company.
I don't explain the details of the simul close to the agents or the bank's title company. It will just cause a bunch of confusion. Just make sure the deal closes and everyone is happy.
Also, does your buyer know what is going on? When I close these deals, my buyer has to sign a document saying that he/she is aware if what is going on with the simul close. I have never had a problem doing it this way, but a freind of mine had a buyer refuse, and he had to go get 50k of his own cash to close the deal. Luckily he had it.
Real Estate Investor · Lincoln, CA · Member since 2009 · 28 posts · 1 vote
17y
Yes i want them to know for sure and have proof i just dont know where to get a document like that? Could you by chance foreward me one to my email or mail me one if i give you my address?
I want it in writing so if something goes wrong and he knew, he doesnt try and turn the story.
Now as for your friend, if the buyer backs out, is there a way to have the right contingencies to where i can walk from the deal without getting the money? I know it would be a great deal if i was doing it, but if someone wouldn't go through and had no buyer, i dont want to be screwed you know?
I have someone with some money to lend but say this was a deal that was over my limit to repair it, i would simply send it off to the other investor for him to make alot and me to take a small chunk via the way we are talking about. But if they do not sign the doc and i dont have the cash, i just dont want to be stuck.
and as for your document, if you have someone sign it, and THEY back out, do you have it set up to where they are responsible? or what?