wholsaling REO's

As I have said in this and other forum topics, I am a noobie, however I have decided on wholesaling properties as I start out and make some capital. Is there anybody out there that has had success in wholesaling REO's and if so what are you doing? My thought would be that if the house is an REO then I am sure that there have been several people looking at putting an offer in already.

Edited: 06/26/2010 at 05:32AM

Jason Cummins

Real Estate Investor · Katy, Texas

430 posts
32 Influence
2 Awards

Icon_minipost Jul 22 '08, 01:00 AM

I would encourage you to search the wholesaling forums for this same topic. There are plenty of great discussions on this already. I will however tell you that whoelsaling REO's is not nearly as easy as whoelsaling distressed owners properties.

Edited: 06/26/2010 at 05:33AM

Andrew Massaro

Wholesaler · Tampa, Florida

246 posts
422 Influence

Icon_minipost Jul 22 '08, 02:20 AM

I don't touch them. Dealing with lenders is a whole different ball game.

Edited: 06/26/2010 at 05:33AM

Alfred G

5 posts

Icon_minipost Sep 12 '08, 01:00 PM

I was informed by an individual that it is basically almost impossible to do an assignment deal with an REO unless you go with the bank's "assignment clause". I think he mentioned that with their clause, the bank has the right to reject your assignee. Is this right?

Edited: 06/26/2010 at 05:54AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75527 Influence
15 Awards

Icon_minipost Sep 12 '08, 08:38 PM

Close. The bank won't reject the assignee, they will reject the assignment clause. Every REO I've bid on had a big wad of addendums you had to sign. One of those items said "no assignments." They will also control the closing company, which will make a double close tough.

Edited: 06/26/2010 at 05:54AM

Jon Holdman, Flying Phoenix LLC

Mark Robichaud

Real Estate Investor · Andover, MA

6 posts

Icon_minipost Sep 14 '08, 07:25 PM

We are closing (hopefully haha) on a REO wholesale. They are a pain in the *ss to deal with the paperwork on. The legal paperwork the seller/lender put forth upon accepting our offer was about 4 pages, which basically said 'we agree to whatever the seller says, and no matter what our P&S says, the addendum shall control'.

The bottom line; REO's seem to take longer than typical wholesales. They are worthwhile (this one was a list price of $83,900, FMV $135,000, needs about $25k in repair, our purchase price is $32,000. This deal has taken us about 6 months to get to this point.

Best advice: get a good Real Estate atty involved early on (as soon as the seller accepts your purchase price). A good Real Estate atty can start handling the legals early on and save you a lot of time.

Edited: 06/26/2010 at 05:55AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75527 Influence
15 Awards

Icon_minipost Sep 14 '08, 07:36 PM

So, how are you actually getting the bank to agree to this? Assignment? Double close? Something else?

If this is taking so much work, is it worthwhile, in the end?

Edited: 06/26/2010 at 05:55AM

Jon Holdman, Flying Phoenix LLC

Robert MacKinnon

Title Representative · Tampa, Florida

13 posts
1 Award

Icon_minipost Sep 16 '08, 09:20 AM

I have only seen this work as a double close, i.e. A to B; B to C, when C was a cash / hard money buyer.

Edited: 06/26/2010 at 05:56AM