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.
Also my general practice is to always get thirty days before I have to close. I always start marketing the property before I sign the papers. So once the realtor tells me I have the property, I immediately start marketing.
Although there are a lot of REO agents (especially if you are in a large city), only a few of them move most of the deals in the area. You definitely want to find them and build a relationship with them. A big REO dealer will not blink when you make a low ball offer. They don't care about the amount; they want your offer because they know that the more low offers they submit, the faster the bank will negotiate. Eventually the property will sell faster and at the lower the price.
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.
One more thing I do when dealing with REO's is to make a lot of offers. 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 of them; you can never have such good deals when dealing with homeowners. - 15224
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.
Also my general practice is to always get thirty days before I have to close. I always start marketing the property before I sign the papers. So once the realtor tells me I have the property, I immediately start marketing.
Although there are a lot of REO agents (especially if you are in a large city), only a few of them move most of the deals in the area. You definitely want to find them and build a relationship with them. A big REO dealer will not blink when you make a low ball offer. They don't care about the amount; they want your offer because they know that the more low offers they submit, the faster the bank will negotiate. Eventually the property will sell faster and at the lower the price.
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.
One more thing I do when dealing with REO's is to make a lot of offers. 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 of them; you can never have such good deals when dealing with homeowners. - 15224
About the Author:
About the author: Jesse Davis is an experienced wholesaler in the Jackson, Mississippi, Real Estate market. Click here for tips on how to wholesale Real Estate and to get a free audio on Wholesaling Real estate
