OfflineAwhile back I wrote a thread on using Land Trusts to wholesale REOs. Since then the market has changed tremendously. It is becoming increasingly more difficult to get a bank to accept a land trust on the purchase contract. The reason for this is because many investors have abused this method. Banks are tired of seeing "weird" things on purchase contracts. They're tired having their properties locked up for 30 to 45 days only to have them fall out of escrow.
Does this mean we lost our "secret" way of wholesaling REOs? No. Where there is a will there is a way. First, we need to make sure we have a solid buyer's list and POF. You should have no contingencies in your contract. Your escrow period should be 30 days or less. The contract should read your name or company's name and that is it. When you receive the bank's addendum after their acceptance of your offer, you write "exact vesting to TBD at closing." That is how you're going to close in your buyer's name. You tell the agent you have several LLCs and you haven't decided what to do with the house yet. Once you figure it out you will let escrow know what the title should read. As soon as you have a buyer, you call escrow and tell them you have figured out what to do with the property and give them your end buyer's information.
This is a much cleaner and simpler way of doing business. Of course, you can always do a double close.
Good luck...
KimmyJ
Press on...
Hello KimmyJ7601,
Thank you for the updates.
Please educate me on the following concerns I have since following your original post on the above subject.
1. On your above post, you said to not put contingencies on your offer. What happens if you do not find an end buyer ? You will be forced to close on that deal, right ? Or the less than 30 days close of escrow is your way out ? Meaning, if you do not close within the days you specified on your Purchase and Sale agreement, the contract is automatically voided ?
2. Did you have any success doing the above with banks yet ? How did you produce your Proof Of Funds ( POF ) ? You mentioned Coastal Funding and I found another one thru one of the comment on your original post, http://realestatedayfunding.com . Have you been using any of them ?
3. How do you go about the Earnest Money Deposit (EMD) when you submit 100 offers a week ? My real estate agent is new but willing to put forth the effort and thinks outside the box as well. I will give her a try and see if we can grow together.
I like this method of getting a deal and I sure would want to get some more knowledge and tips to make it a possibility, please. Thank you for your effort of educating us here and even for the updates.
I am fully engaged ! Read and still reading PFRN the third time.
Anyone here from Las Vegas, Nevada ?
Deliberately,
Walter, Las Vegas
I am very interested in this post and I want to know the answers to the above questions as well. Do others do REO sales this way? There are so many of them that it would take my team a lifetime to go through them all. I would love to find a way to get them with no money out of my pocket. I know you can't assign, but that seems very creative. Just my biggest concern is stated in the other post, would I be responsible to purchase property if I have no end buyer, and what are my exit stradegies?
Richard
Bothell, WA
Know what truely matters in life, consume yourself with that, and you shall never be disappointed, afraid, or alone. Give your gratitude always, give respect to everyone, and you shall never be anything less than what matters the most. Give praise to the Lord, forgive yourself and others, and with all of this together you will get a taste of what heavens lie ahead.
Has this worked for anyone? I am trying to find a way to wholesale an REO.
... Verses: 35 "but those who hope in the Lord will renew their strength. They will soar on wings like eagles; They will run and not grow weary, They will walk and not be faint." Isaiah 40:31 ...