I was wondering if it was common for wholesalers to make offers for REO properties through realtors and how do i handle dealing with a realtor in this regard? I don't know if it's something i should be doing. Thanks in advance.
Most REO's are going to have a listing agent so you can go to them directly or find one that will represent you. Also know that the contracts will not be assignable.
A work around for the assignable contract would be to get the property under contract with an LLC, then sell the LLC for your fee plus setup costs of the LLC. The buyer would own the LLC and the contract wouldn't technically be assigned.
That's not really what wholesaling is about, if you want to peddle listed houses go get a license. You can def buy out of MLS, but it generally takes making a lot of offers and stumbling onto a motivated bank. What value are you bringing if you are just marking up a listed property? You may make one or two work that way, but you'll never build a successful business around that strategy IMO.
Like has been mentioned, the banks dont want you doing that, so they wont allow you to assign the contract and some (BofA) will do a special warranty deed restricting a sale for a few months.
You can do the LLC and sell the LLC but only a few buyers will go that route. Its a pain for them and they cant borrow for purchase, so it'll shrink your buyer pool and the ones that will do that will almost surely want a super good deal to put up with the hassle.
Typically when making an offer on a REO property, Proof of Funds or a Pre-Approval letter is required with the offer. Most wholesalers are trying to avoid the use of their funds or credit.
Thanks for all the great tips. I definitely have a better understanding of REO properties and what to do and what not to do.
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