So I have not yet dove into the REO market as far as investing and wholesaling. I was curious what the thoughts on this would be. Do the banks usually negotiate or is the listing price pretty firm? Do a lot of people wholesale REO properties or is it a better market for actually obtaining and flipping?
Any complaints, comments, concerns would be greatly appreciated!
I would say REOs are better for an investor that does retail flips or does flips and rentals. I've heard that the price is generally pretty firm but I believe that the prices end up going down over time at least from what I've seen on the MLS because banks want to get the property off their books. I'm actually looking to obtain and retail flip REOs in my area from off the MLS.
@Matthew Rollo I've bought a few as buy and hold and it worked out well. They would drop the price over time, I think it just depends on the bank and their motivation.
I know every REO contract I've seen prohibits assigning so keep that in mind if you're trying to wholesale. They also required verifiable POF (they called the bank to confirm), earnest money as a cashier's check within 48 hours, and a quick inspection period.
Hope that helps and good luck!
I had been an REO Listing Broker for 10 years, a majority of REO, wil not allow "and or Assigns" on the contract, or ant type of assignment, even to another entity the buyer may own. as far as negotiating, some do some dont, and some will at certain times and then wont at others, lots of variables, as for a source for "flips" and rentals, if the numbers meet your needs by all means, and if you need to finance, REO's may be your best option, the best deals are cash deals,, I would say since i became a cash buyer, i have been able to save 10-15% because it opens new markets up, things others cant buy due to the risk, like Sheriff Sales, Occupied sales, and "Cash Only" Deals. Good Luck!
Awesome, this is what I was trying to figure out. I didn't think it would be a good wholesale unless I could get the price down but it sounds like it's more of a waiting game with the banks. POF is no problem but sounds like they work out better for flips unless I can use hard money as a transactional deal, one day lending thing. Cool.
I appreciate everyone's input and will keep all this in mind. BP.COM FOR THE WIN!