wholesaling reo on mls

11 Replies

How can you get around the 60 day hold requirement the bank ask

for when you are trying to wholesale it to a investor

thanks,

Jay

Find another bank that requires less time. I've come across a few that only require a 30 day waiting period of being on the market before accepting offers from investors. Be sure to contact the asset managers directly to establish a good business rapport and make sure the information that you may see on their website is accurate / up to date....

Kudos,

Mary

Hello, Jay. I'm not certain how one can bypass the 60-day hold requirement by some banks. However, I do know of a hard money lender/transactional funder whose sister company has an extended funding program (up to 12 months, I believe) for wholesalers to resolve this issue. This program is strictly for those who will hold the property for 60 days prior to flipping it to an end buyer. The company is called One Day Funding, Inc and can be found automatically via a Google search.

Updated about 4 years ago

For all who view this post, the extended funding program is an "Extended Transactional Funding" program for folks who are required to hold onto a property for a certain amount of time prior to flipping it to an end buyer.

- The requirement isn't meant for anyone to get around it.

- A 12 month loan is not transaction funding for wholesalers. That is a hard money loan for flipping the property.

- If you want to master wholesaling bank properties, you need to know who owns the property and their addendums / requirements.

The traditional way to do this is to buy it in an LLC and then sell the LLC. Since when you sell the LLC the ownership hasn't changed, the LLC is still the owner, it complies with most bank resale restrictions. However banks are getting wise to this tactic. They may not accept an offer in a newly formed LLC or an LLC that has not yet been formed at contract signing.

While this can work in some or most situations, it is not without risk.

This post has been removed.

IMO, that's insanely risky ..

Hey, Phil. I most definitely feel you, as the uncertainty of the outcome can make one very anxious. It's quite more involved than the traditional request for transactional funding for a quick flip. In order to obtain the funding, an appraisal and home inspection report must be ordered (paid by the borrower) and LTV must be 75% or better (possibly that percentage can be less for loan amounts under 50K). Also, funding is only available in certain states. I haven't used the extended funding, but if I do, I will be sure to post my experience.

@Jay Thackerson , were you able to resolve your issue with the 60-day hold?

Originally posted by @Ned Carey :
The traditional way to do this is to buy it in an LLC and then sell the LLC. Since when you sell the LLC the ownership hasn't changed, the LLC is still the owner, it complies with most bank resale restrictions. However banks are getting wise to this tactic. They may not accept an offer in a newly formed LLC or an LLC that has not yet been formed at contract signing.

While this can work in some or most situations, it is not without risk.

As cheap as an LLC is, I guess the next step is to form LLCs and "season" them before buying a property? Lol

I guess you could put it in a trust and sell the trust. I dunno Banks may have caught onto that one too. Those sneeky devils.

this is jay,

I have been told by an investor that if an reo property sits on the market

for 15 days anyone can bid on it without restrictions , is this true ?

@Jay Thackerson - It really depends on what restrictions the investor is speaking of. For instance, there are restrictions in terms of when an investor can place offers on some REO properties. Fannie Mae and Freddie Mac implement a "First Look" protocol with their inventory. This means that "non-investor" buyers are the only ones who can bid on these types of properties for a certain amount of days. After the First Look period is over, investors are free to place their bids. HUD is structured the same way - exposing its inventory to "owner occupants" for a certain period of time prior to allowing investor buyers to bid. Then, there are some other lender owned properties that are only available to investor buyers after having a certain amount of exposure to the market. It really depends, though. I'm not certain if this answers your question in its entirety, but I thought I'd give my input based on my own bidding experiences.

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