Looking for advise on buying my first REO Bulk Package.

6 Replies

Hi Bigger Pocket Community,

I heard about REO Bundles than can be purchased in bulk from banks and started looking into it. I live in The NYC area and was wondering if anyone can share their experience in buying one (either in or out of the state). I would prefer for the properties to be located somewhat close to each other as well. Would anyone recommend doing this? Is there anything specific i should look for when inquiring?

Thanks!

@Eran Matalon your post is interesting, but raises some questions. Where did you hear about REO bundles? Do you have experience with buying REO properties before? What is your plan for a bundle - are the rehabs for you or are you looking to buy and hold them for rentals?

@Dan Barli Hi Dan, I am looking to buy and hold these properties for rentals and figured it might be a better idea for me to buy a package rather than individually acquire the properties. I personally have never bought or been involved in REO properties before and from my research i found very different opinions regarding them but non from people who have actually bought them.

@Eran Matalon that is certainly a good strategy and good way to scale. What market(s) are you looking to do this in? In my experience with REO properties, they are sold strictly as-is and sometimes who "who is." Meaning if there's a tenant/squatter in the property, they will become your problem after you close. Getting inspections on REO properties can be difficult and often the banks don't even own the properties they are selling. So you'll have to be patient while they clear up title issues. PM me and we can talk further =)

@Dan Barli I am looking for anywhere in the 5 Boroughs that can yield me a good return (I live in Brooklyn).  I figured that they would be sold as-is, im not too scared of that since i have been dealing with distressed properties primarily. Not being able to do an inspection kind of raises some doubts. But all in all i will continue looking into it. Thanks Dani and i will be in touch!

That's more myth than reality on the scale you are talking about. Unless you are an institutional buyer, no bank is going to sell you bulk REO's (No reputable bank in my opinion). If you are looking to buy "onezie-twozie" REO, yeah, sure, all day but you'll buy like everyone else. On the open market.

My response is as a seller so, you may get different responses from different perspectives. As a seller, I sell everything on the open mark to maximize recovery, by exposing my assets to the largest possible buyer population. I also do sell bulk portfolios but only to institutions.

I don't have an appetite for discounting a bank owned property to a bulk buyer where I may be going after the borrower for a deficiency. Lawyers seem to pounce on those for some reason...

@Eran Matalon

You would be really lucky (or maybe unlucky) to buy a "REO bundle". An REO tape is pretty much a unicorn these days - especially in good areas, and especially where the assets are within close proximity to each other. Even when buying multiple properties from the same seller at the same time, pretty much everything now is one to one - meaning one parcel, one contract.

I've bought and sold a decent amount of properties, many purchases were directly from financial institutions, however there is only 1 occurrence in my life (7 years ago) that I purchased a bundle of assets on the same contract - and half of those assets were total garbage and the deal was a disaster.