Ultimate Bulk REO Secrets

Archive for the ‘Bulk REO Investing’ Category

The main advantage of Bulk REO Purchase Procedures is the lack of red tape slowing down mainstream real estate sales. Bulk REO purchasing follows a simple, yet effective and well outlined procedure, a go-between between the Buyer, Escrow, Buyer’s bank and Broker of Records to obtain required information and satisfy sale conditions. The goal of purchase bulk REO procedure is to define the property, the buyer, the seller, sale price and fund information. The process requires completion and submission of Bank Letter, Confidentiality and Non-Circumvention Agreement, General Fee Agreement and Buyer Profile trough ten well defined steps:

• Step 1: Completing and transmitting of purchase bulk REO agreement. Buyer’s Mandate/Buyer sends a completed purchase bulk REO agreement to the Real Estate Company via email/fax/upload.
• Step 2: Transfer of purchase bulk REO agreement to Escrow.

The Real Estate Company transmits this purchase bulk REO agreement to Escrow and the Broker of Record.

• Step 3: Based on the received purchase bulk REO agreement Escrow quotes and transmits Buyer’s mandate/Buyer the request for a Bank Letter.
• Step 4: Buyer’s bank transmits the Bank Letter to Escrow.
• Step 5: Escrow Officer verifies the funds by contacting Buyer’s bank and, conditional to positive results, notifies the Broker of Record.
• Step 6: Broker of Record forwards the offer with the bank proof of funds for purchase bulk REO agreement to the REO bank, who puts it into queue to be sold to the highest bidder.
• Step 7: if Buyer’s bid is accepted, the selling REO Bank takes the next step by:
• Sending the tape to the Seller’s Agent for delivery to the buyer
• Blocking the tape in the Buyer’s name for a 3 day period.
• Step 8: Depending on the seller, the buyer is given an exclusive 48 hour period to examine the tape and decide if he/she wants to proceed in performing his due diligence.

Buyer that wishes to precede wires a deposit to Escrow’s banking coordinates. Deposit, when received, continues to block the tape for the buyer’s benefit.

• Step 9: To complete the sale by wiring Purchase Price as stated to Escrow for the purchase bulk REO package he/she has chosen, buyer has:
• (3) Banking days from the time he/she has wired the deposit for any order of $25 Million or less.
• (5) Banking days from the time he/she has wired the deposit for any order over $25 Million.
• Step 10: As the last step of bulk REO sales, the Escrow Officer arranges for Title Insurance, transfer documents, and all other forms necessary to close escrow. All payees must e-mail the Broker of Record their banking coordinates so their commission checks can be sent to them. Escrow closes and pays all concerned.

During proceedings Confidentiality and Non-Circumvention Agreement is singed and stamped by all parties. General Fee Agreement is completed and validated. Depending on the agreement, Buyer irrevocably instructs Escrow to release a small percentage of the selling price, payable in equal amounts to the Buyer’s Mandate (where applicable), Seller’s Representative/Mandate (where applicable) and to Real Estate company involved. For selling price percentage of 3% this means 1% to each of the three parties involved.

Is it possible to back out of the deal? Yes, there is a procedure that lets you back out gracefully. In cases where a Buyer does not wish to proceed with property acquisition, he/she are obliged to notify Escrow. Escrow will refund 90% of the deposit, with the non-refundable 10% used to liquidate damages. Following completion, bank makes the REOs available to the next highest bidder. Escrow notifies the Seller’s Representative, who in-turn notifies all payees, should the transaction fail to close.

Bulk REO investing is a saving grace of many real estate inventors desperate to climb out of the recession hole. And with a good reason. Bulk REO is a sure way to bring in millions for pennies.  All you need is nerves of steel, good guts, solid strategy and great love for what we all hold dear- money.

Love for money is a given if you take time to read this article. So are the guts if your bank account is on a ready. We will supply the strategy and nerves of steel come with practice so don’t worry about that for now.

After all, bulk REO investing all it is not much different than paying poker. With cards open. Oh yes!  In Bulk REO all cards are on the table and your bank account better be on a ready.  Rules are simple enough. Keep your cool, don’t expect miracles, don’t bet too high, be good for your money and for god sakes do not try to cheat- you will be caught. Play the right card at the right time and you will clean the table.

What it comes down to is that as far as strategy goes, Bulk REO investing is your game as it has easy to follow rules:

• Going is good while demand is high and supply good.

With so many properties going in foreclosure, supply of bulk REO is reaching epic proportions. Banks are itching to clear out their over-flooded books. Demand for money making flips is high perfectly matching the supply. It is clear skies for a gutsy REO investor.

• Bulk REO sets realistic goals.

Think millions, not billions and you will better be able to gauge the angle, the investment needed and the weighed risk.  There is nothing worse that trying to jump a mile and falling short by a meter. Start smaller, work your way up  and you will succeed.

• Good reputation reels the money in.

We all have to start somewhere. Same with Bulk REO. Do not hesitate to contact the bank with a nice rooster of Bulk REO ready for taking. To pony over Bulk REO, banks want to be sure you are good for it. You need to build trust. Start off with a few smaller investments to build credibility. Once you have it, you are on your way to the big leagues.

• Open cards.

Bulk REO is a simple transaction with simple rules. You pay and banks give you Bulk REO. Going in with the major bank guns blazing just to kiss the wall when they ask for few million you know you don’t have – is bad.  To avoid having the door slam shut in your face, be honest. Communicate your budget, start with smaller banks and move up. Banks love a reliable investor.

• Adaptability.

With bulk REO, you can work on your own schedule and at you unique abilities. The wonderful thing about Bulk REO is that it works with any budget. If few million is out of your reach start smaller.  Low risk means anyone can make it in Bulk REO investing as long as they apply solid business practices.

Bulk REO is the investing of the future. As strategy and income builder it is superior to many investment strategies that deal with red tape and small print. By borrowing from established practices of simple supply and demand, Bulk REO is simple the best thing around.