The Incredible Vanishing Bulk REO Seller

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Catherine Bach was last seen in 2000.  Famous for her role as Daisy Duke in the Dukes of Hazzard, her whereabouts have been unknown for more than a decade.  Then there’s Jan-Michael Vincent.  He gained stardom from the popular 80’s TV series Airwolf.  No one has seen this guy since the show was cancelled in 1996.  And the list goes on and on. 

  • Gil Gerard from Buck Rogers and the 25th Century – missing since 1993.
  • Bronson Pinchot (Balki) from the TV sitcom Perfect Strangers – disappeared in 1998.
  • Shelley Long (Diane from Cheers) – off the radar in 1996.
  • Joe Piscopo, stand-up comic and Saturday Night Live regular, AWOL in 1995.

This is sad.  These up and coming celebrities were stolen from us in the prime of their careers.  Vanished.  As a public service the Center for Vanished Celebrities is seeking help from us – the fans.  If you have seen any of these stars, perhaps on a late-night infomercial hocking weight loss products or on a local used car commercial, please contact the Center immediately.  Because the Center for Vanished Celebrities exists, as their website says, “to locate and rehabilitate those poor unfortunates.”

I’ve been thinking about creating a similar service called the Center for Vanished Bulk REO Sellers.  Its purpose would be to track down all of the principals, brokers, marketing representatives, specialists and managers that promised me bulk REO portfolios at .30 – .70 cents on the dollar and then promptly disappeared.

In 2008, I was asked by the manager of a private equity fund in California to perform due diligence on a Fannie Mae bulk pool of 78 single-family homes located in Arizona, California, and Nevada.   I analyzed 38 of the properties that were located here in the Phoenix area.  Much to my surprise they were all listed on the multiple listing service for less than Fannie Mae’s asking price.  When this was brought to the broker’s attention we never heard from him again.  I can only conclude that he was abducted by aliens or placed in the bulk REO seller witness protection program.

Last June, in a blog post titled REO Tapes:  The Loch Ness Monster of Real Estate, I documented several other examples of these mysterious disappearances.   Here’s how one of my readers responded:

“I am a real estate professional in the Tampa Bay area and I had an interesting conversation with a Senior VP of Bank of America and the bank’s position is they would rather wait for the market values to come up than sell off at .60 -.70 on the dollar. They have already written off so much they would prefer to wait it out.”

That’s what I thought too.  So I was skeptical when a Realtor approached me back in October about a client he had that purchased 450 homes directly from Fannie Mae.  This Realtor told me I could buy them for .70 cents on the dollar.  Since that meeting I’ve called or emailed this agent at least 10 times.  I just left him another message last week and my call has not been returned.   No doubt he went on a vacation to the Bermuda Triangle. 

Not that the banks aren’t selling these bulk REO packages off at a discount.  They are.  Just not at a good enough discount for us fix and flip investors to make any money.  And when the bulk REO seller realizes I have access to the multiple listing service and know my values they conveniently stop responding to emails or taking my calls.  It reminds me of what the prison warden from the Shawshank Redemption said when Andy escaped, “Man up and vanished like a fart in the wind!”

About Author

Marty (G+) is the Chief Financial Officer for Rising Sun Capital Group, LLC, a real estate investment firm based in Gilbert, AZ. His firm purchases homes at the courthouse steps and public REO auctions. They have two exit strategies, either fix and flip or seller financing.


  1. Marty – It’s because they and most others who are pitching or doing business in the “Bulk REO” space are completely full of crap or got bamboozled into thinking that they could do business in the space by some guru. Of the hundreds or thousands of people who I’ve heard are players in the space, I think maybe less than a handful have actually closed some kind of Bulk REO pool, and these were all very small groups of properties (less than 10). Then again, I have yet to see any proof, so I’m only going on their word at this point.

    My advice — if someone is pitching some kind of Bulk REO deal to you, move on. If you’re thinking about spending your time getting rich selling or brokering Bulk REO deals, move on.

    You’ll save yourself a lot of headaches and will be able to be productive with your time as opposed to wasting it.

  2. Josh has it right. There are a bunch of jokers trying to work in this space that can hardly read or write. Everyone is somebody, who knows somebody, who knows somebody and nobody knows anything and the tail wags the dog!

  3. keoki malama on

    Hey Marty,

    I heard from a friend in the industry that is qualified as a bulk REO buyer, was approved, then bid and won a bulk REO contract offered by Fannie Mae. He went through the process only to be told at the end that they changed their mind and would not sell it to his firm and took his deposit? You ever heard of this happening to anyone else?

  4. Below is an email about bulk sales with Freddie Mac. I have been hearding “next month” for about 9 months now. I do think that bulk sales/discounting sales will happen in the 2nd part of the REO market which we are now entering into and will last for 2 or 3 years. Also Chase bank has an awesome discount program for non-profits.

    On Fri, Mar 4, 2011 at 8:13 AM, HomeSteps Bulk Sales wrote:



    Thank you for your interest in Freddie Mac Bulk Sales properties.

    This email is sent to notify you that Freddie Mac Bulk Sales currently has no offerings but will resume some time later in the year.

    Freddie Mac is currently enhancing the Bulk Sales process in efforts. Our hope is that the enhanced process will give our investors not only the ability to take a deeper dive into the assets that interest them most, but to also complete a more timely due diligence. Once we have resumed our Bulk Sales, you will be contacted via email with details surrounding the new process. Expect communication regarding the details of the new process when completed.

  5. It has been my experience that it is easy to get lists of bulk REO tapes directly from the banks and am currently receiving lists from several banks. However, I initially tried to go through bulk traders and narrowed it down to two – one of which had an address in a seedy strip mall outside Atlanta and the other out of someone’s house, so I have given up on that angle. I am now looking to purchase roughly 50 properties anywhere in the country. In all of your experiences, what amount of discount would be typical for this type of purchase. Before I contact my potential investors, I need to know if this all makes sense… Thanks!

    • Amanda, I would be very skeptcial. I don’t know of anyone that has come across these lists easily. Chances are these so-called lists you’re getting are nothing more than a collection of REO properties already listed on the MLS. Why are you looking for 50 properties anywhere in the U.S.? How much working capital do you have? Why not just focus on one market? What’s your exit strategy?

      • Hi Marty,
        The lists I am receiving are directly from 2 different large banks. I still don’t know if I can purchase them for a discount that is worth it, but I can verify that they are real lists. The information lists previous realtors, addresses, condition, bank BPO, etc. I contacted all the realtors on a 30-property test list and they all verified that they were the previous realtors right before the banks pulled the properties off the market for bulk sale. Am I missing something in that? I am more than open to your wisdom/suggestions!

        I have already verified that buying a bulk portfolio in our area or anywhere in California would not come close to yielding a large enough discount. I have a company that will supply realtors on site at each location to oversee the work/sale. Our capital target is roughly $2-$3 mil. Our exit strategy is to flip the properties and sell immediately, pending light rehab. Our most distressed properties will receive no rehab. Please again, give me your thoughts. I am constantly surprised that my experience so far is so counter to what I am reading online and wonder what I am missing.

        Thank you,

        Amanda Fox
        Fox Property Investing

        • Amanda, if you can verify the authenticity of the list and are dealing directly with the seller then I don’t see why you shouldn’t proceed. Of course, the numbers need to work for you and your partners. I would highly recommend that you use a title company or attorney to facilitate the deal.

          I don’t know anyone who has actually closed a bulk transaction like this so be very cautious. Please keep us all posted here on your progress. Good luck!

  6. Michael Yoshino on

    I loved your article and you hit on so many hilarious points, unfortunately all of it is true. As a realtor, I have listed and sold numerous FannieMae assets through their disposition company Homepath. All of their assets are listed with numerous realtors, like myself, across the country at or near current market values. There is no need for FannieMae to dispose of their properties through bulk sales or pools when they receive multiple offers either to short sale or sell the property outright at the listing price.
    I work with all of the major banks with their short sale programs and there is no shortage of properties to bid on. There is no shortage of buyers either, so in my neck of the woods, Northern Calif, business is booming, and I have no reason to search for the all elusive bulk reo seller, as I believe they do not exist. Keep up the great articles, maybe it will knock some sense into someone.



  7. Marty – good article. Just this week there was a workshop at the Five Star conference (mortgage servicers and REO conference) regarding bulk REO sales. The first question to the panel is do they exist? Is it real? My company is in the business of buying in bulk and selling them off individually. They do exist. However 99% of what is discussed on the internet and sites such as linkedin etc is fake and just flat out lies. There are also a lot of misconceptions. I’d like to clarify a couple for the readers:
    1. Bulk Sales is more reflective of the type of sale rather than an indication of volume. The sales are quick, usually on Special Warranty Deeds or Quit Claim Deeds, but many banks do asset level bidding, so you may only win one asset on the list, or you may get 20.
    2. NO bank uses brokers, mandates, etc on their bulk sales. If you are not communicating directly with the bank, don’t waste your time.
    3. To answer Josh’s question – “What makes someone “qualified as a bulk REO buyer?” Just curious…” Depends upon the bank, but in the case of Fannie or Freddie, they do a pretty extensive due diligence which includes your financials for the last two years, business plan, what your exit strategy with the property is (does it fit their mandate of community development and promoting home ownership ie will you rehab etc..), can you handle the volume, what is your experience, etc. All banks are very concerned with “headline” risk. They do not want to sell to buyers who can not handle the volume and the risk of a QCD and bring more negative press to the industry and the bank.
    4. The vast majority of the bulk sale industry is smaller transactions, under 50 assets. With few exceptions, they are always lower value assets.
    5. Bank DO NOT bulk sale CA, AZ, NV, TX assets for example. They have no need to. As mentioned here, these assets sell via REO realtor at good ratios of asking price. You will not see these types of assets in a bulk sale.
    6. Some banks (very very few) do regional mini bulks. This used to be popular, but very rare now days.
    7. It’s completely relational. I got by knowing someone. It’s nearly impossible to walk in off the street and get in.
    8. Only a very few people at a given servicer is involved or knows of the bulk sale process. Bulk sales are part of what’s called Alternative Disposition (Alt Dispo). Essentially properties are listed on MLS, and those that do not sell after a given period of time are sent to Alt Dispo. This is made of two things – public auctions like REDC and private (closed) bulk sales.

    I guess the main thing I’d say is don’t believe anyone that says the bank has hired them to do a bulk sale. simply does not happen The banks have their “pocket” investors who participate in these sales. I work with some of the largest banks/servicers in the nation and across the board we bid against 4-6 other investors.

    As for keoki malama story of not getting their earnest back…there’s more to that story. No bank will hold your escrow unless they have the legal right to do so. Also the vast majority do not require any kind of escrow in order to bid. They perform that due diligence before allowing you to participate in the first place. I do have some banks that send out the bid request with no requirements, but we must escrow to bid, but not to look. Most require neither, but they know my company and have performed due dil.
    For the vast majority, chasing bulk REO is a waste of time, especially in CA, AZ, NV, TX…
    Hope this helps a little.

  8. Hi Marty,
    Although your article is dated a bit. I found it very enlightening to my current situation. I have 2 very serious buyers of whom wish to broker (as a buyer’s rep) a bulk REO deal strait from the bank. Is this even possible? If so, can you point me in the right direction? I have a source that claims they have direct access. But I’m skeptical. Especially now, after reading this thread. Any feedback would be greatly appreciated.

  9. Great article Marty. It’s been a while since you wrote it but I am late finding the site. I ran across it while searching for a buyer for a tape of SFR’s. What’s funny is that even the people who are saying everyone else is lying…are lying. There are bank reps on some deals. There are some fake deals and there are some real ones. More tapes circulating out there are fake than not, but there are real ones. I worked for years managing institutional REO portfolios. I had assets removed from our portfolio monthly for pool sales – sometimes as much as 10% of a 4000 asset portfolio. I have also seen some big time BS. I buy for a hedge fund now and source bulk assets. I got an unsolicited 40 asset tape recently. I always vet tapes via my connections, so I began my work. I researched the owners of record and found different names. I did more research and found that a trustee I know had settled a bankruptcy for one of the owners of some of the assets and a regional bank had received judgements on the defaulted promissory notes and other related assets. I met with my contact at that bank in person and showed him the tape and explained that I I tended to buy it but needed to verify status of the assets. It turns out, they are still notes! They were presented to me as REO bank owned properties. Also, there were 20 homes and 6 vacant lots. The rest of the 40 assets were crap that some investor in the daisy chain added to line their own pockets. The bank was not marketing the assets so god knows how the initial broker got them – the point is – it doesn’t matter how because I know what I’m doing and now I have the real tape. The bank was great. We discussed numbers and are putting a deal together now. This niche of real estate is NOT easy or intuitive. You have to know how to vet deals and make contacts. I have a bunch of pools right now that I can’t sell to my fund because of criteria limitations that I need buyers for. Each one is different, some are investor owned and others institutional from 5 assets to 3000 assets. Keep Trying! Seek experienced guidance! e-mail me if you want to. It’s not all real and it’s not all fake – beware of gross generalizations 🙂

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