Real Estate Investor · Richland, WA · Member since 2010 · 38 posts · 0 votes
Are you buying at trustee sales? I'd like to hear your story. I'm sure a number of other BP folk would too.
I'm hearing that this where the deals are, but I'm unfamiliar with them. How are you funding your trustee sale purchases? what kind of pricing are you getting? What is your success rate at the sales?
At least for Los Angeles County, the spreads at trustee sales are very tight these days as price points are high and lots of them get bid up higher than I would ever pay. As such, many investors are experiencing fierce competition and very tight spreads, so I would have to disagree with the statement that the good deals these days are being found there (of course that is not to say that no deals are available, just to say they are few and far between).
95%+ of my deals come from the relationships I have built with REO brokers, asset managers, and other contacts. As with most businesses, it is a "who you know" thing.
At least for Los Angeles County, the spreads at trustee sales are very tight these days as price points are high and lots of them get bid up higher than I would ever pay. As such, many investors are experiencing fierce competition and very tight spreads, so I would have to disagree with the statement that the good deals these days are being found there (of course that is not to say that no deals are available, just to say they are few and far between).
95%+ of my deals come from the relationships I have built with REO brokers, asset managers, and other contacts. As with most businesses, it is a "who you know" thing.
Given the tight spreads, are trustee sales still an active part of your pipeline. Are you still in the room?
Thanks!
Be in the room if you can, even if you aren't bidding. There are definitely benefits to being there (at least I find that to be the case in may area where we have Sheriff Sales).
Reggie Lal buys at the Sacramento auction- could put you in touch if that interests you. He may know folks that buy at a more local courthouse as well.
Given the tight spreads, are trustee sales still an active part of your pipeline. Are you still in the room?
Thanks!
John, no, trustee sales are not a current active part of my pipeline. REO properties are and I obtain them from my relationships I have developed. However, there are investors making money at trustee sales, just be acreful, as you are a small fish in what is a very large ocean with many sharks and they can eat you alive. Going with an experienced trustee sale investor would be a good learning experience.
John,
The only way is build a relationship with the bank and buy the REO's direct at a much better price. If you are flipping the REO's and you have a good relationship the bank will float you the REO's for 90 days so you can flip them.
The way we started our relationship at the bank we went in and set down with the president of the bank and explain what we like to do and ask for a chance to prove ourselves.John we did get turn down at first but we went bank to bank until we got a yes.
Bart has given an example of how persistance pays off and not giving up on the first answer of no. Most often, you will get a no at first. It is those who keep coming back who prove themselves worthy and turn the no answer into a YES.
At least for Los Angeles County, the spreads at trustee sales are very tight these days as price points are high and lots of them get bid up higher than I would ever pay. As such, many investors are experiencing fierce competition and very tight spreads, so I would have to disagree with the statement that the good deals these days are being found there (of course that is not to say that no deals are available, just to say they are few and far between).
95%+ of my deals come from the relationships I have built with REO brokers, asset managers, and other contacts. As with most businesses, it is a "who you know" thing.
^^^^ Totally Agreed...
I was wholesaling trustee properties in LA but now... it's tooooo dam fierce.
Bernard, would love to hear why... my thoughts is international money... especially asian mula.
Do you mean to say you were buying with cash and selling to financed buyers? I get confused whenever someone uses the term "wholesaling", especially in reference to TS properties, since they aren't ever put under any type of contract, they are simply bought or not bought.
@Jake, I would assume he means taking them down cash then selling to another buyer who is either all cash or financing. In either case, if the deal was a great spread back in the day, it would have been easier to sell via wholesale in the same condition to another rehab investor back then. Today, the spreads are not there so that is almost impossible. (I did say almost)
@Jeff - Foreign mula could be one of the reasons. A second is the speculation investors. They feel that CA prices will likely increase and when they do, at a rapid pace, therefore, they are willing to pay these lower spread, higher prices, rent and hold for as long as it takes, taking negative cash flow along the way until that payday comes. Certainly a strategy, but not one I would apply personally.
Lastly, with the high exposure that trustee sales have received in the past 3 years and all the flip shows on TV, there are so many rookie investors out there who pay more than they should and this is just another reason why the spreads are thinner, not only at trustee sales, but at MLS listed REO's as well.
@Jake - having the end buyer(cash buyer) wire money into a limited escrow to buy "any trustee property"... they tell us the MAO, then our team finds the property bid on it... swap the paper name for the buyer at the steps.
@Jake - having the end buyer(cash buyer) wire money into a limited escrow to buy "any trustee property"... they tell us the MAO, then our team finds the property bid on it... swap the paper name for the buyer at the steps.
Thatsan even better way of doing it! Now you just need to find decent spreads.
He goes over this every time and people argue about it every time. I do not know how will gets things from asset managers, but the best way it to either get lucky and know someone at a smaller bank or to have a relationship with a local REO broker. This will allow you a first look and the hopes that your offer is a day ahead of everyone elses (this usually only works if it is a full price offer).
Don't mean to sound condescending John, but you really shouldn't try to go to the TS (anywhere) yourself if you're still asking these types of questions. There are pros everywhere, and they will eat your lunch.
We're not even close to the biggest fish around, but we're able to buy well because there is generally very little competition for what we're going after. Knowing how to find properties like that and being able to monitor TS status, title, property condition, area market trends, etc are just some of the factors that go into our success. You have either a lot of learning to do, or a relationship or two to build.