Clearly, first you have to get around the assignment clause that most banks have in their contract when they sell foreclosures. What I do now is I either double close, or I have multiple hard money lenders that lend me the money to wholesale my deals - even if I have to close on them before I find the buyer for them.
Another important thing I do, I focus on foreclosures that have been on the market for quite a long time - 100 days or even more. You will be at an advantage making offers when the banks are ready to negotiate.
I also always get thirty days before I have to close. I start marketing the property before I sign the papers, just a habit I have. Meaning, once the realtor tells me I have the property I immediately start marketing.
If you are in a large city, there will be a lot of REO agents around. But only a few of them move most of the deals in the area. You definitely want to get to know them and build a relationship with them. You know you are talking to a big REO dealer when you make a low ball offer and they don't blink. They don't care about the amount, all they want is the offer because they know that the more low offers they get in, the faster the bank will negotiate, and the lower the price will get. So ultimately the property will sell faster.
Many small time realtors don't understand this. They act as if they were the bank and they are reluctant to submit your offer telling you the bank wont accept it. I simply explain to them that they just need to do their job and let the banks decide. Most of the time I am nice to them, but every now and then I get pissed and have to verbally smack them around. You can get away with it when they know you close all your deals and that you do a bunch of them. But I don't recommend this approach if you are just starting out.
Another thing I do when dealing with REO's is I make a bunch of offers. I will tell you that right now 99% of the deals I pick up are foreclosures. You just can't beat the discounts the banks are willing to give because there are so many foreclosures out there. Most homeowners just can't or won't come down like the banks.
Another important thing I do, I focus on foreclosures that have been on the market for quite a long time - 100 days or even more. You will be at an advantage making offers when the banks are ready to negotiate.
I also always get thirty days before I have to close. I start marketing the property before I sign the papers, just a habit I have. Meaning, once the realtor tells me I have the property I immediately start marketing.
If you are in a large city, there will be a lot of REO agents around. But only a few of them move most of the deals in the area. You definitely want to get to know them and build a relationship with them. You know you are talking to a big REO dealer when you make a low ball offer and they don't blink. They don't care about the amount, all they want is the offer because they know that the more low offers they get in, the faster the bank will negotiate, and the lower the price will get. So ultimately the property will sell faster.
Many small time realtors don't understand this. They act as if they were the bank and they are reluctant to submit your offer telling you the bank wont accept it. I simply explain to them that they just need to do their job and let the banks decide. Most of the time I am nice to them, but every now and then I get pissed and have to verbally smack them around. You can get away with it when they know you close all your deals and that you do a bunch of them. But I don't recommend this approach if you are just starting out.
Another thing I do when dealing with REO's is I make a bunch of offers. I will tell you that right now 99% of the deals I pick up are foreclosures. You just can't beat the discounts the banks are willing to give because there are so many foreclosures out there. Most homeowners just can't or won't come down like the banks.
About the Author:
About the author: Jesse Davis is an experienced wholesaler in the Jackson, Mississippi, Real Estate market. Go here for tips on how to wholesale Real Estate and to get a free audio on Wholesaling Real estate
No comments:
Post a Comment