BiggerPockets

Hi Everyone. My buyers have retreated into the woodwork. Any suggestions for finding some more? I've done craigslist,backpage, shopper papers, social mkting, Yahoo groups. My model for acquiring Reos is a bank prop 90days or older, a 5k earnest money, low offers with no contingencies and a POF. Then flip to cash buyer via simultaneous close and no seasoning problems.

Steffan,

Are you using your own funds for the simultaneous close? If not, how are you getting this done. I am not sure what state your are buying in, but in CA, no title company will touch that as it is considered lender fraud.
What is your secret?

You can't really compete with the folks who are doing bulk REOs, and you can't do anything about investors who aren't buying, but if you have buyers who are going around you -- directly to the MLS -- you need to figure out a way to get better deals on the same properties they're trying to get to directly.

For example, I just underbid another investor on a property by $5K, but because I offered over $20K in earnest money and no contingencies, the bank accepted my offer. If I wanted, I could wholesale the property to the other buyer for a $5K profit, and everyone would likely be happy.

Another important aspect of getting your offers accepted (over other buyers, and then wholesaling to them) is to make friends with the REO listing agents. Get to know them, take them to lunch, etc. If you're good to do business with AND they like you, they can often push through deals that otherwise wouldn't get accepted.

For example, I had a listing agent the other day who told me that the bank had countered my offer. She basically then said, "If you choose to stand firm on your original offer, I think I can push it through for you." I stood firm, and the bank relented and accepted my offer. If I weren't on good terms with this agent, I likely wouldn't have gotten the deal anywhere near my original offer price.

It doesn't have to be $20K to make an impact on the seller. Even $5K is more than 95% of the buyers will put down, so if you can even manage that, it will give you a leg-up on the competition.

When you make an offer, put the following in the Special Stipulations section:

"Buyer agrees to provide earnest money to listing agent in the form of certified funds within 48 hours of binding agreement."

This way, you have two days *after* the offer is accepted to get your earnest money to the seller's agent, and you don't have to worry about having lots of checks out there at the same time.

I've never heard of an REO seller accepting earnest money more than 48 hours past binding agreement (let alone at closing!).

In my experience, you can get them to push it 2 days past the point where all the contracts are signed, but then you have to get them certified funds.

Thanks Steph and everyone else. I'm seeing that I may need to increase my EMD which will aid in my offer being accepted quicker. So i'm thinkin' i should find another partner to put up the depo and pay him back from a funded deal. Anyone's feedback?

Thanks Will. These are 2 separate transactions. I buy from the bank and close. I sell to a cash buyer via a separate contract and another closing. No assignment takes place. No seasoning issues. Got it? Who do you suggest I hit up for the EMD?

Thanks Steph. I'm on it.