Help I want to get started in REO's

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Help I want to get started in REO's

Drenda Holmes
Real Estate Investor · baltimore, MD · Member since 2009 · 69 posts · 12 votes

Hi I am interested in finding out all I can about REO's. I live in Maryland and I know rules differ from state to state. I want to know if there is a way to put in a contract with the bank and then flip to end buyer with out having to do a simultaneous closing or a double closing.
I was told that you can set up and LLC and they I guess I would be selling my contract to the end buyer, but how do you go about that. HELP PLEASE.

Or is there another way that I can do it without all the stress of double or simultaneous closing. Thanks in advance for any help you may be able to offer.

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Stephani Davis
Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
17y

I've never done it using an LLC, but know a few people who do.

You would be making the offer in the name of the LLC, (example, 123 Main St, LLC), and then selling the rights to the LLC to your end buyer.

Like I said, I have never done it this way (I do a simultaneous close instead), but know a few people who are currently using the LLC strategy, and it works fine for them.

Steph

P.S.
Selling via double or simultaneous close is really not that stressful if you have a good title company on your side.

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  • Stephani Davis
    Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
    17y

    I've never done it using an LLC, but know a few people who do.

    You would be making the offer in the name of the LLC, (example, 123 Main St, LLC), and then selling the rights to the LLC to your end buyer.

    Like I said, I have never done it this way (I do a simultaneous close instead), but know a few people who are currently using the LLC strategy, and it works fine for them.

    Steph

    P.S.
    Selling via double or simultaneous close is really not that stressful if you have a good title company on your side.

    1Reply
  • Drenda Holmes
    OP
    Real Estate Investor · baltimore, MD · Member since 2009 · 69 posts · 12 votes
    17y

    OK thanks a lot Steph I appreciate it. But do you know how to sell the rights or someone I could talk to about doing with the LLC....and is double closing against the law in some states.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y

    Drenda, In order for the LLC process to work, your buyer must be all cash as banks will usually not lend to a new entity.
    If that is what you are attempting to do, then all you need to do is sell the shares of the company to your end buyer. Contact an expereinced RE attorney to help you set up the LLC (or which ever entity is best for you) and they will also be able to provide you the documents to sell that entity.

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  • Stephani Davis
    Real Estate Investor · St. Petersburg, FL · Member since 2008 · 190 posts · 91 votes
    17y

    I know there are many title companies who will not do a simultaneous closing because their underwriters will not insure the transaction. People say they are "illegal" but I have never had anyone back those claims up.

    Add me as a contact and send me a private msg, and I will put you in touch with someone who can explain the LLC method to you.

    Steph

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  • Drenda Holmes
    OP
    Real Estate Investor · baltimore, MD · Member since 2009 · 69 posts · 12 votes
    17y

    Steph how do I add you so that I can send you a private message.

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  • Anthony E Russell
    Real Estate Investor · Los Angeles, CA · Member since 2008 · 148 posts · 22 votes
    17y

    Drenda,

    Click Stephani's name and you'll access her profile. Look for the "colleague request" thingamajiggy on the left side of the interface.

    Hope that helps.

    Anthony

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  • Drenda Holmes
    OP
    Real Estate Investor · baltimore, MD · Member since 2009 · 69 posts · 12 votes
    17y

    Thanks Anthony

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    17y

    Drenda,

    Since you are new to investing the best way for you to gain experience is to actually buy property for yourself. Going through that process will give you the experience you need so you will know what to do when you sell to you clients.

    Investors will be more likely to want to buy from you b/c you have actually owned investment property.

    Good luck!!

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
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  • David Ligon
    Real Estate Investor · Fort Lauderdale, FL · Member since 2009 · 14 posts · 9 votes
    17y

    You can also use a land trust in some states to transfer ownership with out having to double close.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y
    Originally posted by David Ligon:
    You can also use a land trust in some states to transfer ownership with out having to double close.
    On REO properties, that is less and less efffective these days as banks will simply refuse to accept an offer from a land trust. (Just FYI)

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y

    They are highly effective on other transactions though.

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  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    17y
    Originally posted by nationwidepi:
    Originally posted by David Ligon:
    You can also use a land trust in some states to transfer ownership with out having to double close.
    On REO properties, that is less and less efffective these days as banks will simply refuse to accept an offer from a land trust. (Just FYI)



    This is very true, I have never had a land trust contract go through with an REO.
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