Assigning REO's VS Dean's Video blogs(DG ADMIN RESPONSE NEEDED)

Great question, I am looking forward to responses.

I would love to hear from Anita too, but she has been AWOL from this site since I joined a little over a month ago. I read tons of her postings but she is not active on this site right now.

Great question. I have been asking myself the same question. My realtor and I are going to attempt to make offers on REO's with "and/or assigns" in the offer. She is going to tell the bank that I am an investor and have different LLC's and colleagues, and at this time, I do not know which LLC the property will go into, or whether my colleague wants the property in his/her name. I'll let you know how it turns out.

As for Anita, I think on one of Dean's conference calls he said that Anita's health is not good, and that he sent her best wishes. This may be the reason we have not heard from Anita in awhile.

KimmyJ

Well Jason, you're not alone. I too will be finding out soon. I'm going to submit 3 different offers and see if they even bite on 1. This will be a good learning experience.

I am totally with Jason and definitely feel the same frustration!

It is frustrating, especially for newcomers who desperately need something to happen, even small amount assignment fee or small success to be able to move forward. Most prop I found are REOs or going-to-be REOs. What would be a good strategy for our beginners to have higher chance to succeed?

Thanks.

I dont understand why a double close is a problem.

It's true. The REOs are a tough one for assignments (speaking from experience), BUT the banks do not need to have a clue that you plan to double-close. You are making a straight offer, and then just re-selling to another party. jason JUST did that with a HUD house. I'm guessing CBR has done it, too, with ones he's not kept for himself.

I've got offers in on 3 REOs right now that look very much like they'll be accepted (I might be screaming for a HML if they all are!). The trick is they love it when you offer CASH. But remember, cash doesn't have to mean CASH. If you have a cash buyer lined up, you can do like Jason & Jeremy did, and borrow someone ELSE'S money for the transfer, whether it be Coastal Funding or some other source. For my contingency, I put in Inspection Contingency. They usually ask to have it done within a short amount of time before they will accept the offer (in MY experience). I would NOT suggest offering cash if you have no way of fulfilling it, though. Just make your offers based on financing approval. I had an REO offer accepted last summer with a financing contingency. There it IS just a matter of making enough offers.

One other thought... 20-25 offers a week is great. If I was just starting out, I probably wouldn't make them all in one day. Make 4-5, see what's accepted/not accepted. Make another 5, and so on and so forth. NOW, anyone with more experience please correct me if I'm wrong. And where I'm at now I'm throwing all caution to the wind. I've got offers in left and right. My realtor asked me today as I signed another 3, now what are you gonna do if all these get accepted? I said "Get a bunch of good deals, I guess!" and smiled.

Rina

I hope all of your offers are accepted. Good luck and let me know how it goes. If all 3 are accepted and you start screaming for a HML, you can come and scream to me and I'll help you. All the best.

You got it!!!!

Rina

I just put in 8 offers today mostly REO's.Lets see what happens.I was wondering how you put your offers in without proof of funds letter or did I read that wrong.

Correct me if I'm wrong but here's how I put my offers in.

I went to Coastal Funding,clicked on proof of funds.Typed in address and amount I need.Then get an email with that letter.type up the offer and attach fund letter and foward the offer.

Mark asked what's wrong with double close.Eric at coastal told me to be up front with the bank,so in my offer that's what I was doing.Should I not be up front.I dont want to waste my time.I was also told the banks don't want endbuyers or any extra contingencies.So I'm kinda confused,because Rina just wrote the bank doesn't need to know about your end buyer.

I'm just throwing out all possible questions.I think I'm getting closer to the prize because I feel I'm punching away at a lot of good questions and I feel a step futher up the road.
Thanks for all responses
DGFAM is awesome.

Hi Rina,

We are new to this and I was just reading about how many offers you have put in. Are you assigning them or keeping them for your own investments? If you are assigning them, how many days are you asking for closing and where are you finding all of these buyers?

HEy Rina
On these REO's do they require you to use their contracts or can you use your own? IF you have to use theirs can you just add your normal contingencies? How much time do they require that you close within? Can you get extensions if you see time is running out? If you get extensions do they impose a late fee type of thing?
Sissy

Also...do they require that you use the realtor assigned to that piece of property or can you just do it yourself?

I have made numerious REO offers - but they were not assignments. I only had one accepted, but then it got scooped up by a cash buyer, which I was not. I would still suggest that while they are time consuming and take a long time for an offer - they are still worth it and can result in a great deal for you. I am not giving up on them - as more and more are coming onto the market.
As far as 25 offers a week- I wish there were enough listings in my area to do that! There just arent in my price range. We just have to keep trying all avenues and keep at it - because I know when each of us finds the right strategy we will be successful! Good luck to all!

hey man,
When you buy something, does the seller care what you do with it afterwards? No, it becomes your possesion, and you can do what you want with it right? By getting the property under your name with another funding source would mean that the property belongs to you. So for example, you buy a car from a dealer, using Bank of America's car loan, the car is yours. Now if you fixed up and decide to sell it later, will the car dealership care? No, Bank of America will, cus they want their money back. So here is your situation.

Submit your offers as if you were going to buy the property yourself, using whatever funds you have available to you. When the deal goes through, it is yours to deal with and off their books. If you use coastal fundings, just remember that you need a title company that does back to back closings and an end buyer.

The way I see it, you are not being shady, because you are buying the property out right, and at the same time you are well with in your rights to sell the property someone else. You are being upfront in the fact that you are buying it out right from the bank.

Things to keep in mind:

use the clause, subject to lender approval, if you can't line your end buyer up. That way you have an out in case you can't find anyone to buy your property of your hand.

lastly - see if seasoning is an issue.

IF you go the coastal funding route, just make sure you have a title company that does back to back closings and make sure your buyer is in place.

Lastly, Ive said it before, but whats wrong with putting those same offers in with other properties that aren't REOs???? There are plenty of people out there in distress, pre-foreclosures, short sales, fsbo, landlords that don't want to be out of town landlords, people who need to sell cus they need to move. Yesturday I read a blog from a guy who got a sweet deal with an owner who didnt want to be out of town landlords and with his loan he got from the hard money lender + a free year of no payments, he pocket something like 31k dollars with properties that will generate positive cash flow! They weren't REO's. You gotta look at all your routes my friend. I can't remember the feed, but you even posted on it, so try using that strategy as well if you currently aren't already.

Hope that helps, anyone tell me if im wrong please.

kris

I do have a Title Co.That only does double closings, no assignments.So if I get one of these offers accepted(Which now I have about 15 offers in)I would make sure there's no seasoning and tell them I have to use my Title Co?I keep reading Title Co. is sellers choice.

Next, I am open and trying all routes,for some reason from the start 3 months ago,When you see all the talk about foreclosures,thats what I was only searching for and that stuck in my head.Thanks to Dean and all of you,I can see so many different routes to take now.

Another ?
Do I need to find another Title Co.For when I want to do an assignment or am I fine with just using back to back.Sounds Like my Title Co.does it all the time and will help me through it.

As a realtor and beginner investor, in dealing with REO's or short sales the lender always wants to dictate who the title or escrow company will be. They don't want to have the closing set up with someone who's unfamiliar with all the aspects of closing those types of difficult transactions. If you can get them to go with someone else...congrats!

I've never done a double closing but have heard of them and understand the concept. What would a lender do if they became privy of such information if it wasn't disclosed? I'm sure I'd have some further questions about it if I was actually pursuing one.

Also, for those that submit all these offers what do write in the contract for earnest money? As little as possible, do you use your own money, a promissory note (I hear banks don't like those), etc? In trying to do these deals no money down I'm trying to figure this one out.

Thanks - Marc

I dont know what criteria banks use to choose their escrow companies/escrow officers but it certainly is not based on competence.

no, you don't need another title company if you like the one you have when doing assigning of contracts. If you like em and they are fair and reliable, use them for all your transactions. =)

Hey..

Some of the banks are asking for proof of funds, some are not. I'm actually working on that right now for one I submitted this week. I called my business banker today (at the local bank we've always done business with) about getting a letter. Now this is funny. I told her of the 5 properties (2 REOs, 2 short sales , and one court case) that I MAY get acceptance on. She asked if I could get a lease signed to submit to the bank. Well, we (the bank) jumped the gun with another property we had in escrow this summer, so today I said I didn't think legally I could get a lease signed on a property I didn't own, but maybe I could just get in writing what the potential tenants would pay for rent, along with a completed application. She said that would be good. SO, I will bring in all the info on the properties in the morning and see what they come up with. If I need proof of funds letter before they can get it to me, I'll have to go another route. The thing about getting properties locked up is, the bank (and HML's from what I understand) don't want to get into anything unless you DO have it under contract. THAT's why it's so important to get out there and get the deals locked up. Then you have something to work with.

As far as Coastal Funding, I really appreciate that we have that resource at our fingertips (thanks again, Sissy). I think that if I were to get their proof-of-funds letter I would only do it if my full intention was to go with Coastal Funding. And absolutely go by their rules when dealing with them. I have been to their website and Jason, you are right. They want the bank to be fully aware of the ABC transaction. So yes, follow their rules to use their funds. But, if using other funds, Kris explained it great (in my opinion). You are buying, and then you are selling. Why would the seller care or need to know who YOU are selling it to? But that is not legal advice, that is my opinion.

Choice of Title Company. I ALWAYS put "buyers choice", and I've never had an objection to that. I believe my investor ran into some resistance this summer though with one of his. It may be different in different areas.

Well, hope that covers some of what you were wondering. It's more discussion than anything, because we all get different responses (AND each deal can be unique as well), but that's my experience SO FAR.

God bless,

Rina

P.S. Good luck on the 8 offers!!!

Contracts: I ALWAYS use the WI state-approved purchase agreement that my realtor has. It's accepted and doesn't draw any unneeded attention because everyone involved is familiar with it. I can add whatever contingencies I want to it.

We usually put in 60 days, but QUITE often the bank's counter-offer will shorten that significantly. I haven't yet had reason to object. i don't know about the extension request. We HAVE had to extend the closing date before, but it was never because of our end.

I haven't tried dealing with REOs without a realtor.
Hey, one thing I wanted to mention about a realtor: I have been "training" my realtor to be what I am looking to have. She WANTS to expand her knowledge and is a go-getter. That is great for me because it means she will do what it takes to mold herself into an investor's best friend. She's in the process of reading the BARM that I gave her last week. She said it's VERY motivating! She said her broker has been trying to find something to fire up the agents in the office. (Things are so slow right now) I knew what she was thinking and I said "I have a few copies I could lend out." I just hope I don't turn them all into motivated investors. LOL (seriously) hmmm...Maybe I WON'T do that. lol

Rina

As I was reading your post above my exact thoughts were - uhoh - they are going to become investors themselves! I know my mortgage rep was inspired by my success on first deal and has begun to look for herself. She calls me asking questions all the time! But thats good for me - cause as long as I help her I know she will be keeping on my good side with the best finance deals! My realtor actually was an investor and made good money before doing the agent end - so I got really lucky with her. She actually mentioned last week about maybe pooling money together with a few people but we havent dug into that any deeper yet. Perhaps we should - we could start our own investors club! I'm going off thread here - so will sign off.

I have researched and discovered over 100 out-of-state REOs that look like good deals. However, I would want to know for sure how much the rehab cost would be before assigning the contract to a buyer so I can give a reasonable estimate of probable profits from the purchase. The same thing would be true for an appraisal. Finding out for sure if the estimated ARV isn't too high. Should I pay for an inspection and appraisal before trying to assign the contract or let the buyer do that?

Great Information! Just one question...from studying the course material it stated that not many investors like to do double-closing, is that true? Would you advice that you tell the investor what you are doing and reveal what you intend to profit just to keep the doors open and don't seem like you are hiding anything?

What would you advice in this situation? I'm not trying to damper anyone's hopes.