Wholesaling REOs?

Question

Hello biggerpockets members! I may have a silly question but I am intersted in wholesaling REOs and there are a few properties that I found online. My question is how do I go about calling the lender? I understand that I can simply mail them a letter, but if I want to actually speak to someone? Can someone please lead me in the right direction? Also is there a special clause that I need to put in the contract if Im planning on assigning it to another buyer?  Any feedback will be greatly appreciated. Happy investing to all :-)

Brett Russell · Answer

Account Closed , when you say you found them online, do you mean these properties are listed on the MLS?  Because if so, you should be contacting the listing agent.

You have a bigger issue, though, because the banks put deed restrictions on these properties.  So, you won't be able to do a traditional assignment or double close.  Yes, some people would say you should get the contract in the name of an LLC, then sell the LLC to the end buyer, but in my opinion, you aren't providing much value to that end buyer.  They could probably find that same house pretty easily and then negotiate a better deal than you're offering them once your fee is taken into account.  As a wholesaler, you should focus on finding non listed properties.

Domonique Hudson · Answer

Hi Flaure,

I actually think wholesaling Reo's are a great way to begin wholesaling. No bank is going to allow you to assign a contract you have with them, and most hud homes have a seasoning rule that won't allow you do do a double close. What most wholesalers are doing is submitting contracts by using a Land Trust. Do some research on wholesaling using a land trust, and if you can get a reo at a good price you've found a gold mine because some people just don't do the education....Good luck!!!!

Account Closed · Answer

Thank you Brett for your response. It makes sense.