Guidemap to finding REO Gems...let the adventure begin!

Guidemap to finding REO Gems...let the adventure begin!

During the past few weeks, I have had several DG Members inquire about finding REOs. Thus, I hope this information will be useful and informative to the DG family.

The following is my REO action plan that I created and I hope you will achieve many results with REOs and will share your results, strategies and additional tips, with the rest of the DG family. So be sure to take action and let your adventure begin!

1. Make a list of all the small local banks and credit unions in your local area.
2. Visit each website to learn a little more about each financinal institution
3. Have a notepad available for each call. Always note the date, the financial institution and who you speak to. Write down as much information as you can.
4. Make sure you sound friendly, polite and confident with every person you speak to.
5. Inquire who at their bank would handle or be in charge of their REO properties.
6. Once you get the name and phone number of the Asset Manager you are half way there.
7. The Asset Manager of the REOs may ask what you are looking for. You can reply that you and a group of investors are looking to acquire a few additional properties this month and you would like to know what they have available. Draft your question around your area of interest such as single family homes, Multi-family, commercial properties or vacant parcels of land.
8. The longer you speak to the Asset Manager, the more information that will become available.
9. If they have some REOs find out all the information and then state you will need to discuss with partners and contact them about next steps such as viewing the REOs. This wll give you time to run the numbers and locate the properties. The Asset Manager may even inform you about new REOs that are not even listed yet! How great is that?
10. End the conversation by thanking them and if they do not have any REOs inquire if you could check back with them in a few months

I hope this helps. I contacted 3 different banks this week and followed this exact guideline list. I found out some good information and now I have 3 additional REO Asset Managers that I can contact in the future. The REO Asset Manager holds the key to the treasure chest of REO gems! I hope you achieve much success with REOs and good luck with real estate investing! I hope this Guidemap to fidnign REO gems will let the real estate adventure begin! Believe and Achieve! Smiling - Joe

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reo network

have you tried roenetwork dot com
I have not checked them out myself but I know that dean mentions them in his book.
Bob


Thanks Bob

I looked at that one which is a good one for finding Brokers, not so much for finding properties.


REO websites??

Websites offering REO's vary significantly. Some have good, current information, others not. If the site offers a free trial period, sign up for that and check out the quality of their info. If it is good in the areas you want to invest, then sign up for the service. The services can save you time and effort but your are paying for the subscription, it is a trade-off. Look for sites that offer you good value.
Joe's comment on working directly with local banks won't cost anything but your time and gives you great information. There is also less competition since you are dealing directly with the seller. Keep in mind if you can buy the subscription to the REO's on the web, they are also selling the same information to hundreds if not thousands of others. Explore all the options and see what give you the best results.

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Thanks boconnor

Thanks, you mentors are great!! I'm already starting to call banks (some smaller ones) I was trying to achieve the most bang for the buck and wondered if there were some websites that were better than others.


myrscf,

I found the small local community banks and even credit unions are the best to work with. Usually the local banks with 5 or less branches. The key is not only to find the right contact (Asset Manager) at each bank but to build and culivate a business relationship for future REOs. Most of these Asset Managers know if something is in the stage of preforeclosure and they may say "I have nothing now but call me back in a month." Good luck with REOs. Believe and Achieve! Smiling - Joe

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Great Advise

Joe,

You've done it again. The way you describe this strategy was excellent. I appreciate all that you've done and continue to do.

Look forward to meeting you.


homeless_in_MD,

Thanks for the additional comments, I appreciate it. I believe REOs can be a goldmine for people if you are willing to put in the time and effort, the rewards will exceed expectaations! Network, network, network and make multiple offers. It can happen! It will happen! Believe and Achieve! Smiling - Joe

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Incredible

Love the info here, this is great! Is it possible to get these type of deals on REOs that are listed on the MLS at all? I've got a bunch of them, but I don't have funds, and the 100% financing I can't see flying with a realtor involved. Has anyone been able to pull any of these types of 100% financing deals off with an REO that's already listed on the MLS? Problem is, every property I find are held with huge banks, like BofA, and getting the name of ANYONE is like pulling teeth, and they don't seem to circumvent from their set ways of doing things. Should I basically give up on the big banks and properties I have interest in and go after the asset managers of my local banks only?

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Zion Properties,

I found this strategy does work best on the smaller community banks and credit unions. The larger banks are dealing with so many REOs that an Asset Manager could have hundreds of homes they are responsible for. Normally, they will liquidate their REOs in bulk lits or sell them off by a large auction company over time. I believe the larger banks will be more open to low or creative offers the longer a home is on the market. It does not hurt to try. The best thing is the reltor will get paid if they sell the home. Most realtors may even get a flat fee for the sale of a REO regardless of price. Good luck and I hope this helps. Believe and Achieve! Smiling - Joe

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Questions Questions Questions

REO's: I have several that I am looking into currently, in fact I have found 1 that is listed @ 129k but when I checked it out on other sites it is being listed around 445k to 454k. Also the listing says that it is "pending". Does this mean that someone else has an offer on the table? How do I go about finding out what the homes value really is so I can do some number crunching and get an offer in myself. I found an awesome Realtor and she understands what I am trying to do, she thinks it's a great idea and is willing to work some deals out together as a team.

Sounds to me like REO's are an easier way to go than short sales cause they take so long and possibly with allot of other people (agents) involved. Am I wrong to look at it in this manner. I keep reading how some deals (REO's) have only taken hours to to complete from start to finish. I just want to get "some" deals under my belt so I can learn and move forward with the process with a better understanding of what I need to do. I know once I have been down the road a couple times I am only going to get more excited than I am now. If anyone has advice, answers or suggestions I would greatly appreciate it. Thanks DG family, the forums have been so helpful...

__________________

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-------------------
Moving forward and growing stronger


great info

Thanks for such good info joe. I found a real estate agent that has a list of reo properties as well in several southern states and told me which ones he can help me with and which ones I would have to do the work myself and see what I can find but I have the property listings itself so I basically know where to go and look at these properties or sell them as is. I am waiting to hear back from this agent as I asked him to give me the info on the ones he has in his area and the others closer to me I will have to see what I can find out on them.

Shawn


Joey,

A pendign offer on a home usually means they have accpted an offer but it could be pending an inspectionm fiancing approive or the actual close. Some deals that go pendign don't close and it can be helpful to understand why a deal fell through, such as financing or a problem with the property.

Depending on the area of the country prices can be all over across the board. The best way to get a handle on rpices is see what similar homes in the same area have sold for in the past 3 to 6 months. This can provide a better idea of current value. A good real esate apprasier can also provide some insight but the best way ios to have your relator give you all the similar comps for homes that have sold in your area. Once you start tracking sales and pricing, it becomes a little easier to estimate pricing. Other factors that can afefct rpricing are the numbner os similar homes that are on the market and the average amount it talkes a home to sell after being listed.

REOs will close faster than most "short sales". An REO has been through the entire process and the bank is rfeady to move it to get it off their books. A short sale still has more parties and potential issues to deal with. Good luck with real estate investing. Believe and Achieve! Smiling - Joe

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Shawn,

...Good luck with the potential REO deals. As you establish more and more contacts, deals might be coming to you in the future. A good real esttae agent can make all the difference. It sounds like you have some good leads. Keep the faith and keep up the good work. Believe and Achieve! Smiling - Joe

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REO's

Hi

I'm working in the connecticut marketplace. I'm putting in offers at 50 cents on the dollar with the banks and there not moving. I have a deal were the bank has a 3/1 ranch marketed at 145,000 its worth 200,000 fixed up.The repairs are 20,000. I offer 100,000 and they wont respond. The RE agent told me today they turned down 125,000 cash. What would you recommend. Am I being a pig?
Adam


Adam,

...The better the deal the more options you will have. However if you have a buyer's list and you know what you might be able to flip or assign the hosue for, you may want to adjust your numbers. It is always good to have a good margin and pass on a good deal to others. You reputation will build in the community and amonst buyers and investors. Also, try a few other banks and see what you might find. The more yo ufind the more offers you can make and repeat every few weeks. A bank's motivation can change on a daily basis. Good luck with REOs. Believe and Achieve! Smiling - Joe

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making an offer

do you have to have a real estate agent to make an offer on reos and what form would you use to write up your offer?


rbailey1962,

...If the proepry is listed by a real estate agent, then yes you would want a real estate agent to present the offer. Yo uwould compelte a contract to purchase on the proeprty that a real estate agent would help you complete and they would present it to the real estete agent that has the listing.

If you contact the bank directly and work out a deal you still need a contract. One of the best resources on your A team will be your real estate lawyer. They can assist you with the contract to purchase. Good luck with real estate investing. Believe and Achieve! Smiling - Joe

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Joe

Hello. Thanks for the good advice as always. I have a couple more to ask if you don't mind. I have a list of REO's email to me by a Realtor everyday. I have this list of REO's but not really sure what should be my next action step. I read your post about finding a buyer first so I'm working on it. My questions are:

1. What should I do to get a deal in one of this REO's?
2. I don't have an agent so can I make an offer myself and if I can how should I do my due diligence?

Everything is just a blur to me and I'm still learning things. The more info from you the more I learn. So don't hesitate to let me know that I should be doing this or that. Thanks for the help.

Rendel

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joe

thanks for the help


Rendel,

....In regards to your additional questions:

Q 1. What should I do to get a deal in one of this REO's?

A 1. Try to learn your local real estate market and find those fantastic deals that you can lock-up for maybe 60% or less of fair market value. By knowing the recent comps in the area for similar properties, you will then know a good deal when you lcoate it.

Q 2. I don't have an agent so can I make an offer myself and if I can how should I do my due diligence?

A 2. Yo ucan get an agent to help you with the process, or make an offer through the listing agent for the reo. If the REO is not yet listed try to deal with the bank and consult an attorney for guidance on contracts or questions you have. The information you learn will be priceless.

In any purchase contract, you can make it contingent on gettign the proeprty inspected. This way it may give you a little more peace of mind regardign the deal. I hope this helps. Believe and Achieve! Smiling - Joe

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Joe

Thank you so much. Really appreciate the help.

Rendel

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Thank you

Your guidelines to finding REO gems... brings a much needed clarification for me, as i begin my journey into the REI world... Smiling Thanks again


Thanks Joe

I've been wanting to get started on investing for a while now, and after working as a rental agent in the Boston area for a year now, I'm about to take the next step. By chance, I happened to come upon an opportunity to practice an REO deal; I have a relative (cash-buyer) who is looking for a new home for their mother, and is hoping to find a good deal on an REO. I read this action plan and will definitely be contacting local banks.

I was wondering whether you had any additional advice for strategies that could benefit us, as cash buyers. For instance, can we give an (even) lower offer? Is it ineffective to give low offers on REOs that are brand new on the market or not yet listed?

Thanks again. Any and all advice is appreciated!

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Bennice,

Good luck with REOs. I am glad to hear that my tips for fidning REO gems have helped. Each potential deal you may learn more and more that can help you with that next potential REO deal. Good luck and I look forward to reading about your future deals! You can do it! believe and Achieve! Smiling - Joe

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Steve,

Good luck with REOs. If you have cash to work with, yes I would offer even lower. You can offer an all cash offer and with a fast closing. Sometimes a bank may be motivated to take hte low offer just to get the property off their books. I often feel that if I am not almost a little embarrassed by the offer, maybe I offered to much. The great thing about low offers is you can always come up in price if you choose to. The growing number or REOs and time may motivate banks to consider offers they may have turned down in the past. Good luck and I look forward to reading about your future offers and deals! Believe and Achieve! Smiling - Joe

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Great New Source For REO's - The Veteran's Administration

I have read many posts, but I have never seen anyone post about how to find all of the ( Veteran's Administration Foreclosures ) VA REO's. If you go to https://va.equator.com/index.cfm?, you can choose your area and stipulate criteria to match your needs. The VA has many homes available and they list the descriptions and include the address, asking price, realtor to contact, and a picture. I hope this helps. If you have any questions, let me know and I will try to find the answer for you.

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Tim,

...Thanks or sharing the information. It is always good to look for deals from various sources. Good luck on your deals. Believe and Achieve! Smiling - Joe

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REO

I HAVE TO DEAL WITH BANKS ALL THE TIME. NEVER THOUGTH OF ASKING THE QUESTIONS. THANK JOE


alwms,

....Good luck with REOs. Try to contact the local banks in your area and build a relationship with the Asset Manager. Good luck with real estate investing. Believe and Achieve! Smiling - Joe

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This info is great...Tips for a deal I'm working on??

I have contacted some banks locally without success, but I'll keep plugging away. My area isn't as depressed as the rest of the country. I'm in a college town and it's growing. I like the idea of throwing low offers at a bank better than at someone. I know you have to view it as helping someone out of a bad situation, but at the same time if I make a low ball offer to somebody desperate to sell I feel like I'm taking advantage of them. With the bank...who cares, it's a bank! haha... Thanks for the info Joe.

I've got an REO I'm considering that's out of state. I bought a house there already for my 1st deal and I bought the house outright for cash. I probably paid too much for the home looking back, but it was already rented and the cash flow was good (14%/year). This new house I'm looking at is already rented and the tenants want to own the home so I could do a lease option on it for 2 years. Asking price is 35k and rented at $750/month. It's an old house, but the tenants would be on the hook for repairs. Not too much risk other than them bailing on me. I might offer them 22k in hopes of settling under 30k. I'm hoping to get a bank to let me use the other house as collateral on the deal and try to get the tenants to give me a down payment to make sure they're serious. Any other tips for me on this deal to make it a success?

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