FANNIE MAE REO - YOU CAN FLIP THEM IN 24 HRS!!!

85 Replies

To the folks that have actually purchased these FNM REO's, are you renovating them or simply just closing with a buyer lined up (no renovations needed).

Where do you find your buyers and how do you line them up to buy a house, you don't even own(yet)? What kind of marketing are you doing to get looks at a property that you haven't even closed with the bank on yet?

Thx!

Originally posted by Dave Kennedy:
To the folks that have actually purchased these FNM REO's, are you renovating them or simply just closing with a buyer lined up (no renovations needed).

Where do you find your buyers and how do you line them up to buy a house, you don't even own(yet)? What kind of marketing are you doing to get looks at a property that you haven't even closed with the bank on yet?

Thx!

HI Dave,

I do not hold any REO properties to renovate and hold for the 90 day time restraint w/ FNMA. We just make sure we stay within the 120% rule. We also market for buyers prior to having anything under contract. Once we know their criteria we start the hunt.

This puts us in a position of authority to our buyers, of course explaining who we are and what we do, they understand, accept, and want us to do all the work. This typically works well with people who are just looking for good deals, but have very little clue on what to look for. We educate them up front and look for the best properties.

Happy clients, means great referrals!

We have put properties under contract, then market them immediately even before having it accepted. I already knowing it will be accepted since I keep very close communication with the agent. With this said, I market around and blast my buyers list. In turn, property is under contract, sold, and everyone is happy! :mrgreen:

Hope this helps!

Just wanted to let everyone know. I made an offer on my first REO and the bank accepted it. I am excited and a little bit scared at the same time. Thank you all for your help.

Originally posted by Drenda Holmes:
Just wanted to let everyone know. I made an offer on my first REO and the bank accepted it. I am excited and a little bit scared at the same time. Thank you all for your help.


Congratulations Drenda!

Originally posted by Drenda Holmes:
Just wanted to let everyone know. I made an offer on my first REO and the bank accepted it. I am excited and a little bit scared at the same time. Thank you all for your help.

Way to go Drenda, can't wait til you post that you just received your check and closed your first REO deal.

Walk by faith not by sight. :wink:

Tony thanks so much ffor the encouragement and the verse. I am trying my best to walk by faith, I know if he brought me to it, The Lord will get me through it. I will keep you posted and keep me in your prayers ...everyone:) Thanks again

Hi Drenda,

Congrats on the deal.

I just wanted to mention that if you are going to go the LLC route, you will want to sell your ownership rights in the LLC to your buyer BEFORE closing in exchange for your wholesale fee. Doing this will allow you to avoid having to bring your own cash to the table, and having to pay the fees involved with using transactional funding. The transaction is much like a regular assignment deal, except instead of assigning the contract, you are selling the LLC that owns the contract.

Your only costs in this transaction would be setting up the LLC, which should be much cheaper than borrowing funds from a transactional funding source.

Keep us posted on how the deal turns out,

Steph

Right on Drenda! Is this a FNMA property? Cant remember if it is or not...

To keep everyone posted on our FNMA deal:

We have the CU done already (end buyer paid for it)! Spoke with the listing agent this morning, bank forgot we had a contract on it...but wait good news, bank dropped the price from $45k to $42,500, which in turn dropped my profit by $500 (not a big deal) and my end buyers price from $54k to $51k and she pays all closing costs.

In turn, she has several cash buyers she is referring to us (sweet) and listing agent is emailing me 30 unlisted properties! This just gets sweeter...they have been working w/ FNMA for over a decade and work w/ 8 different other banks. She was very open as to what they have already and what is coming up in their pipeline. Plus, she educated me very well on their process and how FNMA works!

It pays to be friendly!

Thanks Steph,
No I am doing the simultaneous closing because I didnt have enough information on how to do it with the LLC. But I want to do that on the next deal. I just could not find out enough infomration before hand but that is ultimately the route I want to take on the other one. Steph do you know of anyone who has a program out there for sale to tell you how to do it that way. Thanks again and i will keep you posted.

Hi Drenda,

I don't think there is a course available that specifically addresses using an LLC to wholesale.

Did you read the article I sent you that explains how to do it? If you decide to go this route, I would contact a local real estate atty and have them set you up with the proper documents for the transaction, as it is going to vary by state..

Steph

Hi Steph,
Yes I did read the article but I wasnt real clear on what kind of document to use when selling it to the end buyer. Thanks though I have been on the site you told me about with steve cook. So I asked a specific question and hopefully I will get an answer.
Also another investor has just told me about a contract on how to sell the LLC so I am waiting to get that and see how that works out. Thanks

Drenda

Hi Everyone,
Just wanted to let you all know. Closing is set for tomorrow on my first REO deal...Thank you all so much for your help..Im ready for the next one.

Originally posted by Drenda Holmes:
Hi Everyone,
Just wanted to let you all know. Closing is set for tomorrow on my first REO deal...Thank you all so much for your help..Im ready for the next one.

Right on Drenda! Congrats! I am glad yours didnt take as long as mine....we just closed today. It was a FNMA prop. so the mark up wasnt that much, but we walked away with $10,475.88. Not bad, now we have another one in the works and this will be a much bigger profit.

What is your net profit on the deal? :mrgreen:

Originally posted by EVERLASTING:
So we have a REO Fannie Mae under contract for $45k and flipping for $54k. Buyer is under contract and we are doing a double close. Should close in less than 30 days! $9k profit - I find property and partner finds buyer, 2 hours of work!

Okay heres the info for FM REO:

I spoke with the REO agent and she gave me deep insight on Fannie Mae's requirements. She mentioned that you can't resell property after 90 days, unless you stay within a 120% resell range.

For Example:

Purchase REO at $40k x 120% = $48,000 = $8k profit!
Anything over 120% you hold for 90 days.

Now go out, make more money and let 'em rip on the Fannie Mae REO's...hope this helps! :mrgreen:

So you can be under contract, and already have another contract with the end buyer? How do you keep the end buyer from finding out what you are paying for it?

Originally posted by Paul Cordero:
Originally posted by EVERLASTING:
So we have a REO Fannie Mae under contract for $45k and flipping for $54k. Buyer is under contract and we are doing a double close. Should close in less than 30 days! $9k profit - I find property and partner finds buyer, 2 hours of work!

Okay heres the info for FM REO:

I spoke with the REO agent and she gave me deep insight on Fannie Mae's requirements. She mentioned that you can't resell property after 90 days, unless you stay within a 120% resell range.

For Example:

Purchase REO at $40k x 120% = $48,000 = $8k profit!
Anything over 120% you hold for 90 days.

Now go out, make more money and let 'em rip on the Fannie Mae REO's...hope this helps! :mrgreen:


So you can be under contract, and already have another contract with the end buyer? How do you keep the end buyer from finding out what you are paying for it?

YES! I tell all my buyers what we do and they are completely okay with it. I have the knowledge, I build the trust, I find them a deal, they give me their cash, and its a smooth transaction...Honesty is truely the best policy!



YES! I tell all my buyers what we do and they are completely okay with it. I have the knowledge, I build the trust, I find them a deal, they give me their cash, and its a smooth transaction...Honesty is truely the best policy!

We are a servicer for FNMA, so I am trying to figure out how I can put contracts on the inventory we service without creating a conflict of interests.

Thanks for the info.

Originally posted by Paul Cordero:


YES! I tell all my buyers what we do and they are completely okay with it. I have the knowledge, I build the trust, I find them a deal, they give me their cash, and its a smooth transaction...Honesty is truely the best policy!



We are a servicer for FNMA, so I am trying to figure out how I can put contracts on the inventory we service without creating a conflict of interests.

Thanks for the info.

If you service FNMA, you cannot flip them. It would be a conflict of interest...

Thanks Niki
I found the REO on the bank website and located the agent. I told him I only wanted to work with him so that he could get full commission. I even said that I may be willing to continue to work with him and even offer a bonus if he lets me know what he gets first.

So the original price on the property was 67k but 3 days before I put in my offer the bank dropped the price to 41k and thats what I offered. The bank accepted my offer in 24 hours. Closing was set for two weeks but we put in for an extension for 1 more week. I aggressively marketed the property and I had some interest on it. But no contracts. After meeting with Peter Giardini who is my new best friend:) He analyzed the deal for me and told me about using the DOM and DOMP as a tool to price the property.

I had a little higher than it should have been but after he looked at the deal I cut the price and the very next day I had a verbal offer and a signed contract and deposit the next day. We closed by the end of the following week. In total start to finish it took 3 weeks. I made 7900.00 on my first REO deal and I am so grateful to my BP friends for all their help.

Originally posted by Paul Cordero:

We are a servicer for FNMA, so I am trying to figure out how I can put contracts on the inventory we service without creating a conflict of interests.

Thanks for the info.



Paul,

If I am interpreting what you wrote correctly, you wish to acquire properties from the inventory that Green Tree Servicing manages. If that is the case, then your employer would probably be the one with the info as to whether that would be permitted or not.

I believe you should be OK if you are buying FNMA inventory from other servicers; shouldn't be any conflict of interest there. And why are you being specific to FNMA inventory? Don't impose this limit on yourself. Grab any bargain REO you can.