Investor · Fort Worth, TX · Member since 2013 · 22 posts · 3 votes
Ok BP, I need your help. I have been working with a realtor to gain access to MLS listings as well as expired listings. I've come across a few deals that I want to wholesale but of course you can't assign an REO property. Now here's my scenario. I'm looking to do this first deal with no money out of my pocket (because I don't have the funding to do so) and my research has led me to transitional funding to show my proof of funds. My questions would be.
1.) What would be a good way to structure this deal?
2.) Is it better to use transitional funding or a private or hard money lender?
3.) Should I borrow enough to pay Realtor's commission and closing costs?
4.) Where can I learn more information about wholesaling REO's?
All comments and feedback will be greatly appreciated!!!
Well I've done some number crunching and prior to any assignment fees, taxes, rehab costs, closing costs, and realtor fees the particular property I have in mind has roughly 62% equity in it according to the comps that I pulled off of findcompsnow.com
@Jarese Bradford , I have only limited experience with REO but it is always so slow. I would think it taking so long would make it real hard to wholesale it. Without being able to buy it then resell it your options are pretty limited.
Jarese, do some more searching, reading and learning here on the site. Transactional (not transitional) funding is only when you have your buyer already set up, and his funds are with the closing agent. The realtor commission is part of the price as it is paid by the seller, it's not an additional costs. Private and HML will generally only lend you 60-75% of value. You're saying here you think the property is worth almost 3 times the asking price, after it's it's fixed up. I doubt it, but it doesn't matter if it takes that same amount to repair it. If you want some opinions, post some real numbers, real repair estimates and good comps. Unless you have some fairly ignorant buyers, it's difficult to wholesale off the MLS, as everyone else is already looking at them, and most will have resale time restrictions. Your agent should be aware of this.
@Mark Ferguson I'm not sure but I had my realtor send me a list of expired listings and this was one of them. The county assessor website shows that it's owned by wells fargo and I am waiting to hear back from my realtor on the property.
Are you including rehab costs when you say it has 62% equity? Its really listed low enough that the purchase price plus rehab is only 38% of ARV? Seems highly unlikely.
Realize that REOs are on the MLS and visible to potential buyers. To wholesale them you need to get them under contract well below the listing price. Enough so you can add on your fees and costs and well be below the current listing price. Because the current listing price is too high. If it wasn't, it would have sold.