I was recently reading a email about wholesaleing bank owned/properties. Is this possible? If so is it a easy process?
you can wholesale anything you purchase w your cash. Can not assign (at least to my knowledge) a REO.
Account Closed Fannie and Freddie will actually place deed restrictions on a property so that you can not sell the property at all for a certain amount of time after they release the property.
The other issue is that most of the time wholesalers don't have the cash to buy the property, and therefore don't have proof of funds to show the bank
Some you can, some you can't. You'll need to see all the addendums.
In general it's best to stay aware from banks when it comes to wholesaling. The ideal wholesale deal is one you buy cash and resell for cash.
@Phil Z. thanks for that input phil
Most commonly with Fannie Mae and Freddie Mac at least you cannot resell the property for more than 120% of the purchase price within the first 90 days. That means that if you purchased a property for $100,000 you can sell it for $120,000 the same day but not a penny more. If you want to sell it for more you'd have to hold it for 3 months which cuts into your profits and in many cases defeats the purpose. With most deals I've found, the 120% rule gives plenty of room for a healthy wholesale fee after you deduct your closing costs.
Hope that helps.
@Anita Fofie do you have a email were I could ask you a few questions? Because from your response I think I could transactional funding
With REOs, usually you are not able to "assign" the contract. They won't allow you to write the purchase contract with you as the Buyer "Chad Kennedy and/or assigns". This means you need to actually close on the transaction with cash or transactional funding before you can sell to a new buyer. If you plan to sell the property to a buyer who is getting an FHA loan, FHA will not approve that loan until you as the owner of to property have owned it for a minimum of 90 days.
Sure Chad it's:
[removed email address]
Typically banks will not allow you to assign a contract on a REO.
@Shari Peterson Account Closed I couldn't see your email please give me a email at [removed email address]
You can't assign a contract on an REO. But if you are using your LLC to buy it, you can sell your LLC.
You can also purchase in the name of a Land Trust then you can either assign the beneficial interest in the land trust OR you can double close the transaction. Land Trusts are free to set up and are private. You can change beneficial interests very easily which makes them the perfect vehicle for wholesaling. Some banks are starting to realize that many wholesalers are using land trusts so this mitigates some of the benefits. Certain banks (like Bank America) will often refuse to accept an offer if the buyers name is a land trust.
@Anthony Largie thanks for that comment, I'm going to send you a direct message on here to talk a little further
Russell Brazil , I think the restriction you are referring to is for owner occupied Fannie and Freddie properties.
I'm new to buying wholesale properties but I would think it would be easier to buy wholesale properties from motivated sellers in a pre-foreclosure or handy man special than a bank owned property?
Great information guys, thank you for your knowledge.
To answer the original question... "is it possible" . I can say definitively YES! I just closed one in New Jersey a couple weeks ago. It was not a smooth transaction by any means but I double closed it.