REO's VS Sale by Owner???

Question

What's the difference in wholesaling REO's & sale by owner????

Darrin Smith · Answer

Appreciate the help!

J Scott · Answer

You can generally close an REO in 2-5 weeks; you'll end up on the shorter side if you use your own title/closing company and there are no title issues.

In terms of reselling it, it could be a double close (in which case, it's just hours or days), or it could be several months if there are restrictions on sale by the REO seller.

Will Barnard · Answer

The main difference is that wholesaling REO properties requires some creative strategies as you are not allowed to assign the contract. With FSBO, you can usually negotiate or simply include that language into the contract without the homeowner even knowing what it is. That makes for an easy wholesale that way.

With REO's, you must close with your own funds or that of borrowed funds, and thne re-sell either immediately or soon thereafter using a double close. You can also use entities or trusts to accomplish wholesaling an REO which would not require the double closing and can save some money.

Curt Davis · Answer

If your paying cash for the REO you can have a buyer lined up to buy it from you at the same time your buying it, its called a double close.  Consider it an A-B-C transaction all at the same time.  You can collect earnest money from your buyer and make sure hey are ready to close the same time you are with the bank.  We do it regularly.  It saves us money by not having to close and hold the property.

Darrin Smith · Answer

If paying cash for the REO how soon to close so that I could flip it?

Curt Davis · Answer

The difference is for REO's you need to be for real as in not broke and can close on them and you cant assign them.  More seasoned investor, able to put down minimum of $1,000 in earnest money and show proof of funds to close if needed.

FSBO, you can be broke, put down little to no earnest money, normally for new investors.

Hope that helps.