Acquiring Short Sales and REOs

10 Replies

Hello BPers,

I have been looking into acquiring Short Sales and REOs for fix and flips as well as to wholesale.  I understand they take a while but I'm unclear on a few things.  

From the info I've come across, the ART is in the offer. Its been suggested to send as many as possible and see what the bank comes back with. I've also been told to be selective in my offers. I'll try to find a happy medium.

Does anyone have any suggestions on submitting offers to banks?  

Do you send a simple "letter of intent" to the foreclosing agency?

Should I as the Investor contact the Bank directly? Or is it better to have an Agent make the offer on my behalf?

Any input is greatly appreciated!

Thank you guys,

Will G

Most banks that sell reo's have a real estate firm that handles the sale for them, so this is who you will more then likely make your offer to, you can have your agent contact their agent to make the offer, or you can ask the listing agent if they can represent you as a buyer, sometimes it will be a yes other times it will be a no, yes the art is in the offer and it is also in the communication skills of the person submitting the offer, its not just about (AMO) "always making offers" i would say that 50% of my offers i make that get accepted i do not close at that number, i get a kick out of getting price reductions, i do not subscribe to the concept of making a lot of offers, if someone is not convincing a bank that they have the ability to close on agreed terms then you can make 100 reo offers a day that will be pointless,

Shortsales do take longer since a price has to be negotiated with all liens and junior liens etc, but they are easy to get once you get an effective system in place, and if done correctly with the right number of deals its worth the wait.

@Jerry Malcolm thanks for your input!  Makes perfect sence. Are there Any good books that you'd recommend on building and implementing an effective system?  

Thanks again!

@Brent Coombs thanks for your concern ;) 

I guess in one way or another I have PAID for it... Be it time or money! I'm not exactly sure where I "came across" the info, but somewhere along the way in my quest for knowledge on the the subject. 

At times I (and I'm sure most of us have) have paid for bad information, as well as have gotten some great information for free!  Which is why I look to BP, to confirm or repudiate what I've "come across", as well as to get the input of those who Have more knowledge and experience on the matter than I.

With that being said, did you have any constructive input to add to the conversation?

Thanks again! ;)

Originally posted by @Will Gandy :

@Brent Coombs thanks for your concern ;) 

I guess in one way or another I have PAID for it... Be it time or money! I'm not exactly sure where I "came across" the info, but somewhere along the way in my quest for knowledge on the the subject. 

At times I (and I'm sure most of us have) have paid for bad information, as well as have gotten some great information for free!  Which is why I look to BP, to confirm or repudiate what I've "come across", as well as to get the input of those who Have more knowledge and experience on the matter than I.

With that being said, did you have any constructive input to add to the conversation?

Thanks again! ;)

Everyone wants an edge; a strategy that will put them ahead of the pack. And there is no shortage of "gurus" who will tell you that THEY are willing to share their strategy (intro for free of course, followed inevitably by seminar/summit/accessory fees that keep increasing exponentially)!

I was hoping you hadn't already jumped off that diving board, blindfolded.

It's just that your thread opening DOES sound like it was the result of you listening to guru-speak ie. "gurus" find it easier and quicker to profit from newbies such as yourself than they can from Bank-owned Real Estate!

In short, I'm not impressed by anyone who tries to spruik REO's as a strategy for newbies!

1. Banks are obliged to seek the best return for their shareholders.

2. Banks are obliged to be able to SHOW that they have sought such, to their shareholders.

3. That's why Banks use Listing Agents, and usually wait for multiple offers.

4. That's why the conditions in their contracts likely FORBID short-term profit taking.

Are you getting the picture? Still want some REO action to get you started? Cheers...

@Brent Coombs well said and duely noted my friend! I agree whole heartedly that there's no shortage of "gurus" pitching get rich quick programs and secret strategies. I'm all too familiar... Which is why I seek Input from experienced RE professionals such as yourself to help put things in perspective. (Thank God for BP!)

Thanks again, THIS definitely helps!

@Will Gandy You will learn a lot through trial and error yourself,  good training can shorten that process and help in other ways, but you must be careful of any information you receive from anyone whether its a guru or even a poster like myself on this site, lots of inaccurate information floating around on the web, and many posters confuse opinions with facts. In real estate some things you have to experince yourself, you may be good at something that another poster had zero success with. You will hear some people bash someone else  system or strategy which is unfair to that person unless the basher  knows first hand it does not work for that person, and you will find that what does not work for one person may work for someone else, i do a few unconventional things on a monthly basis  that if i posted it i would get many people that would probably disagree that it works, several factors come into play in regards to reaching your desired goals, effort, intelligence, communication skills are you a likable person with your approach the list goes on, there are many different ways and stratagies systems etc. that can work for anyone and through persistence you will find one for yourself.  real estate is not a sprint, its a hands on outdoor sport.

I wouldn't suggest providing a "Letter of Intent" if you want anyone to take you seriously. Also, if you are dealing with a short sale, no, the bank isn't your contact point. The owner of the property is. The agent is your representative for contact to the borrower's agent, which is their representative. The foreclosure "agency" (?) is not your contact point either. Finally, if it is REO, still, the bank isn't your contact point to issue your artistic offer. It's to the bank's agent, through your agent.

@Will Gandy
Around a year back, I came across an interesting character, online. A guy named Nate Jerowitz from FL, I think, who was aka The Short-sale King. He had made his fortune off of his process (for short-sales) by the age of like 28. By the time I was reading about him, he was already on another venture and delving into the world of marketing. He has his own website too. Anyhoo...my point is only that if I was looking for info on short sales, I think I'd look in his direction. Lol. Good luck!