How to buy reo with no money down

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How to buy reo with no money down

Lawrence Moss
Real Estate Investor · brighton, MI · Member since 2009 · 56 posts · 12 votes

I am on my first deal, I see a reo 3 bed /2bath in a great neighborhood for $6000. I know the house would sell quick for $50000,I will sell for $17000 to an investor I say wow. But I have no money. Is there a legal way of getting around "proof of funds" ? And how does that work with "double closeings"?

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Alnise O.
Virtual · Member since 2009 · 20 posts · 4 votes
17y

There is no way to get around POF. Go to coastal-funding.com, or tempofunding.com or just do a search for POF for transactional funding under google.YOU MUST HAVE AN INVESTOR LINED UP THOUGH. Not to get the actual letter for POF but in order to get this project financed. Before you do all this do your research on the home. Get the comps! See what other homes have sold for in that area less than a few miles away. Find out how much repairs cost and what the After Repair Value (ARV) is.

To get details on "double closings" type this in the search and you will see all the postings that have details.

I wish you well, welcome to the forum.

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  • Alnise O.
    Virtual · Member since 2009 · 20 posts · 4 votes
    17y

    There is no way to get around POF. Go to coastal-funding.com, or tempofunding.com or just do a search for POF for transactional funding under google.YOU MUST HAVE AN INVESTOR LINED UP THOUGH. Not to get the actual letter for POF but in order to get this project financed. Before you do all this do your research on the home. Get the comps! See what other homes have sold for in that area less than a few miles away. Find out how much repairs cost and what the After Repair Value (ARV) is.

    To get details on "double closings" type this in the search and you will see all the postings that have details.

    I wish you well, welcome to the forum.

    3Reply
  • Joel Soforenko
    Real Estate Lender · East Longmeadow, MA · Member since 2009 · 176 posts · 21 votes
    17y

    Lawrence, If you can find an investor to purchase this house, one of the methods is to put the house under contract and transfer the purchase and sale contract to this investor. Or, obtain an option to purchase and transfer this contract to the investor. Alnise was absolutely correct, it all depends on you finding the investor first. Or, purchase this property owner occupied (if you live close by) and then sell it.

    Joel Soforenko
    Continental Finance Service
    Hard Money, Residential & Commercial Loans

    0Reply
  • Ralph S.
    Real Estate Investor · Sacramento, CA · Member since 2008 · 566 posts · 356 votes
    17y

    Lawrence

    Something listed at $6k that would "sell quick for $50k."

    Be sure. Be very sure. Wish I could find a REO selling for 12% of a "sell quick" price.

    And I think Joel missed the fact that you're talking about a REO. Don't think assigning the purchase will work.

    0Reply
  • Lawrence Moss
    OP
    Real Estate Investor · brighton, MI · Member since 2009 · 56 posts · 12 votes
    17y

    Thank you for your help ,I found proof of fund letter. This opens the door now.Watch out here we come!!!

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  • Lawrence Moss
    OP
    Real Estate Investor · brighton, MI · Member since 2009 · 56 posts · 12 votes
    17y

    Hi Ralph, I know you can t assign REOs I needed a way to show from A to B part of the deal. Costal funding helped a lot.

    0Reply
  • Naskat Williams
    Real Estate Investor · new york · Member since 2008 · 19 posts · 1 vote
    17y

    have read your posts and it has been a godsend! I am learning something new everyday! I never even heard of transactional funding before today, because I have been focusing mostly on flipping.

    Well, you have inspired me to become creative in finding money for my down payment and closing for my first home. I have a bank reo right now that is worth $300k and I can get it for $150k. It has minor repairs, but I was trying to come with the closing costs.

    Now, that I've read your posts I can see that I can do a double closing on this house instead and then I would have money for closings costs to buy another house for myself.

    How did you find your end buyers?I have joined several real estate groups online.

    Also, do you use the same title company/attorney as the bank? At costal-funding.com I see that they want someone to use the same title company to close each deal.

    Thank You Girl!

    I was stressing so much trying to figure out a way to buy my first home before I jump into student rentals.

    BTW I live in BK and and I think this is a great way to finally be able to stay at home with my son!

    Where did you learn this from? The REO forum? I never even looked there, I guess I learned I have to be a master at one thing instead of a jack of all trades!

    0Reply
  • Tom C
    Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
    17y

    If you don't have any cash, where are you getting the earnest money? I haven't seen a bank yet accept an offer without at least $1000 with your offer.

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  • Jesse Ramirez
    Specialist · Las Cruces, NM · Member since 2009 · 557 posts · 71 votes
    17y

    Coastal Funding does not provide earnest money.
    Banks don't usually allow contingencies on REOs, so be prepared to lose your earnest money deposit if you don't find a buyer by closing date.

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    17y

    Joel,

    You know you cant assign a bank REO !!!!!

    Come on now people, lets get back to basics.

    I feel like I am taking crazy pills sometimes when I read the blogs.

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    1Reply
  • Dory Peters
    Real Estate Investor · dc, Washington D.C. · Member since 2008 · 392 posts · 89 votes
    17y

    Actually, although banks normally don't do assignments on REOs, I have heard of that Wells Fargo has accepted a few offers with an assignment in KC (and a few other markets).

    However, the person who got that offer accepted, did state that he first got the offer accepted without the assignment, and added the assignment in later (as part of the negotiation).

    Incidentally, I've had a few lenders accept offers on REOs with an EMD of $100-$300, and I know of others who have done the same thing. There aren't really any hard and fast rules; the banks are making it up as they go along; and the government is winging it too.

    0Reply
  • Jose R.
    Real Estate Investor · Kahuku, HI · Member since 2009 · 148 posts · 25 votes
    17y

    Hell 6 Grand!!!! I would find the money somewhere, take the property down myself then "whole-tale" it (combination of Wholesale & Retail) to the first person with the CA$H (preferably an end buyer looking for a deal).

    If you do it this way you'll end up making more than you would if you wholesaled it to an investor.

    Hope that helps!

    1Reply
  • Lawrence H.
    Real Estate Investor · sydney, nsw · Member since 2009 · 74 posts · 7 votes
    17y

    hi loel
    can you email me I want to have a chat about comm funding
    and we have a system that does not require any money down at all and yes the banks will accept it
    they do here and I believe and we will soon see if your banks there will also
    and I think they will
    a bank wishes to know taht it will get paid the moeny it wants its the way you negotiate the deal
    and thats why we are comming to you guys from here in Australia
    and I think we are going to have fun.
    we have done no money down on commercials and resi here
    and our major will accept them and they are not option etc as we have used them here as well
    haven't seen a US option
    but I think ur standard option should work just needs a legal to change for the market there
    for me its not the no money done thats our problem
    its the refinance and your score system
    and if joel has funders thats what I am trying to find.
    getting reo to me is not a problem if you give the funder a system or structure of how you want to proceed and if that system shows they can be funded out thats fine
    your system does not have a way of proof of funding from here is sydney so we have to do it from there which is a bit harder
    but not impossible and we are working on it at the moment so any funders out there email me so we can work out how we do this as for the contract of sale
    we have exchanged and settled on $1.00 here not sure again of your sale contracts but it requires here that it has a monitary value it does not say how the settlement amounts are to be supplied
    anyone that has comntacts within a reo vendor by all means send me an email
    as thats what I am looking for at the moment
    I want the LA and san diego areas at this stage.
    please don't post the problems or issues with regards to buying property as we are Asutrlian investors and we are buy and hold investors so we understand property investing
    and I am on I think 5 or 6 boards here and a few network group just on investing.
    we are also not interested in assigning we are straight buy, refinance and hold

    0Reply
  • William Hurndon
    Real Estate Investor · Gulfport, MS · Member since 2009 · 4 posts · 1 vote
    17y

    I heard on a blog that it is possible to flip an REO, in order to do this is you have to get the REO first,then find a buyer add them to the contract as a partner on the deal.Both you and the buyer go to closing,once you close with the Bank,you do a Quitclaim an turn your interest in the property to your buyer for your fee. Has anyone done this type of transaction.

    0Reply
  • Debra Bennett
    Real Estate Investor · Long Beach, CA · Member since 2008 · 13 posts · 0 votes
    16y

    I have assigned REO's and have flipped them, just depends on the banks I guess. If you try hard enough anything is possible

    0Reply
  • Phil M.
    Developer · Staten Island, NY · Member since 2009 · 88 posts · 9 votes
    16y
    Originally posted by Lawrence Moss:
    I am on my first deal, I see a reo 3 bed /2bath in a great neighborhood for $6000. I know the house would sell quick for $50000,I will sell for $17000 to an investor I say wow. But I have no money. Is there a legal way of getting around "proof of funds" ? And how does that work with "double closeings"?

    Be positive on the repair costs AND the ARV..

    0Reply
  • Leesa Cramer
    Real Estate Investor · Levittown, PA · Member since 2008 · 36 posts · 3 votes
    16y

    Hey Phil,
    The original posting is from may of '09. Hopefully he considered everything before he bought it.
    Lawrence,
    How did everything go with this? Have any updates?
    Sincerely in Christ,
    Leesa C.
    Eph.2:8,9

    1Reply
  • Katie Park
    Member since 2018 · 2 posts · 0 votes
    6y

    Hi, would like to know to how to wholesale the REO, I've been getting the REO properties, haven't figure it out how to wholesaling it. Would greatly appreciated info if anyone had experience.

    0Reply
  • Katie Park
    Member since 2018 · 2 posts · 0 votes
    6y

    Hi, would like to know to how to wholesale the REO, I've been getting the REO properties, haven't figure it out how to wholesaling it. Would greatly appreciated info if anyone had experience.

    0Reply
  • Brent Grizzle
    Investor · San Diego, CA · Member since 2020 · 10 posts · 4 votes
    6y

    Did you try to add "or Assignee" after your name/entity on the contract to see if they would accept that?

    0Reply
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