Comments on: How to Close REO Wholesale Deals (Part 5 of 5): Using a Land Trust

By: HN

HN — Tue, 24 Aug 2010 21:18:40 +0000

Stephani,

I am just getting into this REO wholesaling so this might be something that has already been answered else where but will appreciate your reply.

If I am putting cash offer on REO with proof of funds as you mentioned earlier, how much minimum earnest money would be required which will get my offer accepted by HUD or selling bank. Also if I am not able to find an end buyer within certain amount of days as mentioned in contract I understand that earnest money will be non-refundable. Is there any way to get that earnest money back or part thereof back from the bank provided I have put 5% or so in earnest money while signing the contract or any other strategy which you have in this regard.

Also has it happened to you where your offer got accepted but you couldn’t find an end-buyer within the term of the contract and how you dealt with it?

HN.

By: giocco

giocco — Fri, 20 Aug 2010 23:54:08 +0000

Hi Steph,
How do you handle the double set of closing cost in a back to back or in a doubleclosing. I’m in PA and only the transfer tax here is 3%? for instance in a $100,000 you will have to pay $3000 0n the first transaction and if you sold it for $ 115,000.00 you will have to pay another $3450, that is$ 6,450 just in transfer tax only?????
I’m a short sale investor and what I do is I negotiate with the lender(Bank) that they will pay all closing cost but title insurance and I never purchase a title insurance anyways because I hold it just for a few min.So No Closing on A-B to me

By: Stephani

Stephani — Fri, 20 Aug 2010 20:57:37 +0000

Hi Janice,

You will need a proof of funds letter to submit with your offers if you’re going after REOs. If you don’t actually have access to your own cash, you can get a letter from a transactional lender, which will work in most cases. If you don’t have a letter and you’re making a cash offer on an REO, the listing agent will not submit it. It’s something that is required 99% of the time.

Hope that helps!
Steph

By: JANICE RICHARDSON

JANICE RICHARDSON — Fri, 20 Aug 2010 18:03:11 +0000

HI STEPH!
On all the 5 wholesale steps regarding reo’s, do you need a proof of funds letter if your end buyer is paying cash? If you do, where do you get it, if your not using transitional funding?

By: Steven

Steven — Sun, 18 Jul 2010 21:55:05 +0000

If your buyer is going FHA or conventional then you will most likely have to have some seasoning in the deal (90 – 180 days) before you go to escrow with your buyer.

You can do this in a number of ways – one is buy using an investor or hard money lender to fund the deal and hold it for six months. Get an option for 3 – 6 months from the end buyer and get an option for 10 – 20% to keep them in the game and offer it as additional collateral to the investor (only if the property doesn’t have a good ITV already).

Once the 3 – 6 months have past put the property into escrow immediately and move toward closing.

Hope this helps.

By: robert

robert — Wed, 28 Apr 2010 16:34:39 +0000

Hi Steph, just wanted to say thanks for sharing…real good stuff!

By: Stephani Davis

Stephani Davis — Mon, 15 Feb 2010 02:52:16 +0000

Hi Ron,

No- these kind of deals will not fly if the end buyer is going FHA or conventional…

Steph

By: RON

RON — Sat, 13 Feb 2010 23:32:01 +0000

H STEPH the 5 steps that you have shown us will they woek if the end buyer use a fha loan or conv loan

By: Stephani

Stephani — Sat, 06 Feb 2010 01:55:24 +0000

YUP!

By: mike solis

mike solis — Sat, 06 Feb 2010 00:27:01 +0000

Thank you!!!!

You still need to come up with your own EARNEST MONEY DEPOSIT
when using the LAND TRUST correct?

thanks
mike

By: Stephani Davis

Stephani Davis — Sat, 10 Oct 2009 14:36:12 +0000

Hi Steve,

My preferred method is a simultaneous closing..

Steph

By: Steve

Steve — Sat, 10 Oct 2009 05:46:07 +0000

What’s your favorite strategy Steph? I have been giving my buyers the grant deed and letting them fund escrows lately. Takes some trust on the buyers side to get done though.