The Real Facts of Buying Bank-Owned Property


Denver-Home-Foreclosure

 

So you want to buy properties from the bank?

I’m going to address some misconceptions about bank protocol.

It doesn’t matter if you have $1M or $100M, the response is the same:

NO BULK. No Discounts.

Banks no longer need to sell inventory to get them off the books.

The properties are appreciating.

The banks response after walking in and speaking with asset managers,

“We have the properties on our books, and will sell, but for market value.” 

So even if an investor came with $100M he can’t buy at 75% of fair market value?

No. We don’t offer discounts for bulk purchases, they can buy as much inventory as they want.”

Approved Mortgage application form with a calculator and pen

Think about this, banks are in business to loan money, not sell properties.

They have retail mortgage loan originators that are eager to offer a great loan, and working with conjunction with the REO agents, they may offer a discount to an eventual home-owner, especially if this causes them to come “over the fence”. 

This is their goal. As I see it, its great bait to bring qualified buyers to your bank, and continue the cycle..we are starting to see the fancy loans coming back..soon once again, everyone will have a home…and a loan.

Why would they forfeit the opportunity to offer loans and have a customer  paying interest for 10+  years to sell these fast appreciating assets to investors for a loss?

Doesn’t make sense does it?

OK. Glad we’re thinking on the same wave-length now.

It makes more sense to sit on the assets, let them gain equity, possibly allocate some funds to do simple rehabs, list them with REO agents, let the agents market them on the MLS, and they can sit back and wait for a fish to jump on the hook..that’s when the agent gets you “pre-qualified” with the preferred lender, which may the bank who owns the asset. Thus repeating the cycle.

Bank Repo

I’m guessing this was preconceived and orchestrated.

The only way to win, is to play their game.

Buy properties at market value, knowing the market is primed to be aggressive, especially in the metro areas. In California, seller’s are not distressed anymore, they are gaining equity again (there’s that word again!) The days of buying at discounts that are not justified are finished.

By justified I mean, if a home caught fire, or sits next to a convicted sex offender, or had a horrific death in the property, or burdened with permitting issues, fines, heavy taxes, or just terrible mold damage..things like this, may qualify for a discount. We’ve seen these circumstances call for a reduction.

As a consultant that is direct to multiple banks and institutions, recently received this info from asset managers at major banks.

As a principal and buyer of large numbers of assets $3M-$150M, you can be assured that after registration and getting papered up, we will deliver without fail. You will be expected to understand the nature of your market and make offers at the asking price. Markets like California will not spare you a discount, but it will afford you high appreciation rates, this will make up for it in the long run. Competition is picking up, a land grab is being had as we speak, many large equity funds, and institutional buyers are entering the price at full price and buying their fill of inventory.

This is by far the most advantageous strategy..get the inventory!

Don’t sit on the sidelines waiting to find some unicorn at 75%!

Don’t get me wrong, you can buy assets in small quantities, 1 or 2 at a time for 75%.

If this is your goal, you aren’t my client anyway.

My client is the company who is serious about making offers on bank owned assets.

Real-Estate-Investing

Back in the day, you could find some private seller’s willing to sell at 75%, but now those guys are buying at 65% -70% from special invite only programs..they need to sell at 85% to make a profit themselves. if you aren’t invited into one of these special programs,you are going through this:

Exploring random tapes floating around, getting burned out by joker broker chains. Then eventually you go back to the auction steps or door knocking, letters or whatever. 

I want to make it easier, bridge the gap between qualified, large buyers and bank owned product.

We share a similar passion 

We’re both tired of the games and just want to get down to business!

wastingtime

We also have direct-to-seller, private portfolios of turnkey rented properties in many states, multi-family value-added opportunities, and seller direct non-performing notes nationwide.

Call me or email if serious and qualified. Please no brokers.

Greg Wilson – 858-386-0949

Greg@fixandflippers.com

 

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