BiggerPockets

if you are looking to buy reo portfolios or represent a buyer the best way to go about obtaining these portfolios is as follows. first off make sure you have in mind exactly what you are looking for as the compilers and brokers are not going to read your mind. the next step is to secure the funds to pay for the portfolio because the banks dont want to play games or offer financing. dont waste your time with packages that are floating around the internet or email chains at all different prices, an reo is an reo regardless of the location and they are valued based on the region and priced out as an aggregate average so if someone is pitching california at .65% verses michigan at .30% they are full of beens. the banks and compilers can provide exactly what you are looking for at an average cost of .45% to .55% nationwide. you will need a letter of interest stating what you are looking for addressed to the compiler or bank, they will put your package together in about 48 hours depending on the size and filters and then you have to provide a proof of funds directly to the bank to get the unsanitised list. you have 48 hours to purge the list then you must provide a letter of credit or put a deposit of 10% or more into escrow. you get 7 days to perform due dilligence then you must either deny the package or your deposit goes hard and is non refundable. most banks want you to fund within 15 days. this is the best way to obtain exactly what you are looking for and not have to perform in 10 minutes or lose the deal. this process also helps regulate the pricing and get rid of the riff raff out there.

I am still trying to understand this process.

I read on another post that some buyers will take a block of bulk properties and then sell them off to small investors 1-5 at a time. How do you find those guys? I have customers that would take some at that pace (not sure how I get paid, but I will figure that out once I understand the process better!).

Originally posted by "bmichael"

Hi Midas, I have been viewing your postings and would like to speak to you concerning your business and process. Hope that this is not violating any rules. I am a newbie to this forum but not to REO business.
B. Michael

Consider using the PM button. It will more directly get his attention.

John Corey

Midas,

How is business? Have you closed any portfolios recently? My company went into contract with 4 different buyers on a 20M portfolio from the bank selling at .60

We had 4 signed contracts, they had time to review the portfolio and none of them came through with the earnest deposit and we lost the relationship with one of our best banks. I am very close to loosing my relationship with my direct as well.

I am ready to jump.

:superman:

Phil

Originally posted by "RonanBrian"

I am new here, and this was the most helpful post as of yet!!

Originally posted by "REOpoolsinvestor"

In the first place you have to check with whom you are going to work to get REO pools:
1. Ask LOA of the compiler
2. the master fee agreement should be final in the begining. If it's not it means the source is not direct
3. If you didn't get connected to the bank in the first 3-4 days send the termination letter and do not buy any jsutifications. Not direct!Period
4. Sent POF only to the bank
5. don't buy that they need to pay to the compiler. Compiler should be paid by the bank. If they try to put somebody else in the fee agreement it means the person is not direct and knows somebody who knows somebody who knows the compiler
6. Do not submite more than one order. Submit one wait 4 days... haven't gotten connected to the bank.. move on but do not forget to terminate the order

Thank you for this advice. Helps to understand the process better.

B.

Hello there Brian! When you first posted in this thread you wrote: " I am new here, and this was the most helpful post as of yet!!" and the second time you posted you you wrote: a quote along with " Thank you for this advice. Helps to understand the process better.
B." directed at REOpoolsinvestor! When you first posted who was the post directed? Was it directed to John, Phil, Scott, or REOpoolinvestor? And what was it that helped you out when you first posted as apposed to the second posting towards REOpoolsinvestor? Thank you for your time and have a wonderful biggerpockets day...............

Hi Loki

Well first post to REOpoolsinvestor about the how it works.

But really alot of these posts are helpful.

Im just looking into REO bulk purchasing. Im not sure if im being realistic or not, but im checking it out.

B.

Originally posted by "Flipper101"

Reopoolinvestor left us on Sept 7.

Further it appears he was mis informed, and believed that buying and selling bulk reo was a straight forward process, with a set one size fits all process, and was easy or readily available in the billions.

Thats far from the fact! If anyone is confused and has not been able to buy or sell product, there is a reason for this. Think about it. Think about what types of business trades notes and distressed bebt regularly etc........

Like I said in another thread, call Bear and Stearns, or ICAP and tell them you want to invest in distressed debt for a good start. Then have a good team of Attorney's, abstract and title people and a team for the exit. There is NO FAST CASH in any business. You don't work HARD, don't know what your doing, don't expect to do a big transaction and be compensated.

Nicely done James!

So your saying that I can't expect to put one guy on the phone (whom I have not verified POF) with another guy (who probably gave me a fake LOA to solicit business) and expect them to close on $20 Billion? LOL James do you ever think all this hustle for a fast make at money will come to an end? Thanks for your time James it is all ways a pleasure!

Originally posted by "midas"

dont waste your time with packages that are floating around the internet or email chains at all different prices, an reo is an reo regardless of the location and they are valued based on the region and priced out as an aggregate average so if someone is pitching California at .65% verses Michigan at .30% they are full of beens. the banks and compilers can provide exactly what you are looking for at an average cost of .45% to .55% nationwide..

You make some pertinent and valuable points but absolutely missed the boat on the " full of beans" retort

I have offered packages in Michigan at 12 cents on the dollar and CA only at 58,

Any packages we offer are weighted and if they're weighted in Ohio, Mich, Indiana, Mississippi....there's not a chance it will be offered at the same price point a weighted AZ, CA, FL, NV National tape will ultimately generate

I see the whole " compiler" issue needs addressing as well

Compilers are (for us) traders with access to other floor traders that can " compile, create, insert, mold" a customized offering based on an LOI...we consider it " carving" and it's to fill an exclusive request

It's always fun to embellish and I look forward " as time permits" to swap info,

Stay prosperous and Merry Christmas

I seriously doubt anyone on this forum has had a smooth experience with Bulk REO transactions.

If everyone knew how to do them, then everyone would be doing them, and any broker's involved would have to do only one billion dollar sale to be set for life.

There has to be a lot of hard work and effort to get these deals done, and I don't think they happen overnight as advertised.

It is to my understanding that most investors look at dumping the bottom of the barrel files to bulk sales. I work for a servicing company doing REOs for a few large investors, and bulk transactions occur at the executive level.

My plan is to make the necessary contacts inside my company to become part of these bulk sales, then start doing them with my own team one day. I have wasted a lot of time with investors who want to buy and investors who say they have inventory, but usually it pans out to be wasted effort.

I am beginning to think that everyone just wants a piece of the pie in these large transactions, and usually they are part of a daisy chain.

Congrats Oklahoma, you should be a millionare after this transaction!