Offers on REO Properties

however, I have found that once they accept they usually require a $500 EM deposit for under 50K properties, and $1000 EM deposit for 50K and above properties. Sometimes they may keep your deposit as well unless you have a very valid reason and then it is usually returned. Once you have one accepted make sure you the property is worth the EM required, otherwise you can say you will not give the EM or just fail to give the EM required and it is pretty much over.

but you may want to do FSBO in order not to have the hassle of large EM deposit and the hoops the banks make you walk through.

Also short sales, REO's and Foreclosures have no assignability so you may need to do a trust to go around this, or an LLC and sell the LLC. I just found out that in my state no lawyers seem to understand the trusts and Myself and a seasoned investor are looking to find a way to do the trusts. I really can't comprehend how they don't do land trusts.

I appreciate your taking the time to help me out. This is the first time I have decided to get in on REO's and want to make sure I do it right so I don't end up stuck.

One thing I would like to say is if you put in 10 offers and they are all accepted your offers are to high. You would have a hard time getting an interested investor for those properties. The 25-1 strategy does work (make 25 offers to get one accepted), and if I am getting a lot more offers accepted I need to come down on my offer amounts.

You can also protect your buying interests by making your offer subject to several conditions. These can include a satisfactory inspection, approval of your investment partner etc. These can give you little doors out. Just make sure that the offers are not full of contingencies because this could be a turn off to the lender.

Banks will always give you a due diligence period. This allows you to pull out if you want. Meaning you aren't obligated to buy the property. If you pull out within that due diligence period, you will not have a problem getting your EM back.

I have even had properties go past both the due diligence and financing deadlines (I used hard money to purchase), and the bank still released the EM back to me. I've found their pretty reasonable about that. And I have been buying them for over twenty years.
I'm not saying it doesn't happen, but I've never had a bank try to keep my earnest money.

Something to consider. If you keep putting houses under contract and backing out, the agents and banks will notice. It will get to where they won't even bother looking at your offers. So, do your best to complete the purchase of the majority of houses that you put offers on.

That's why I said if all 10 got accepted then I offered to much, but I am not looking to flip them to investors I am asking as the buyer because I haven't worked in reo's myself much so I was wondering if you have 10 reo offers accepted if you are obligated to buy them, because I do believe you have an inspection period as well so you could always say the property didn't meet your expectations couldn't you?

The reason I asked about that specifically is because I have a friend who is also looking for an investment property in FL (where I am not buying) and she has several properties she is considering so I thought it would be good to put in offers on all of them, but I wasn't sure if that would mean they would all have to be purchased. She is not an investor, just looking for a vacation property to use and rent out when not in use.

Thanks for the tips too - I thought there was an inspection period as well but wasn't sure - how long can the inspection period be?