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Banks have been dumping of REO properties in the market that have created a huge amount of inventory. This action is leading to sharp decline in housing prices. There are many amazing bargains to be taken advantage of when you buy REOs directly off the MLS.
It far easier to go directly to REO properties listed on the MLS than trying to find wholesale deals by marketing for sellers all over town. When you buying directly from the bank, it is the easiest and most efficient way to find wholesale deals.
I recently placed a classified ad on Craigslist for a low priced house that I had under contract I received phone calls from around the world along with 30 other phone calls a day for this property. This is at the same time the media is saying how bad the housing market is. The prices are so low that bargain hunters have come out of the wood work. Anyone that has cash knows that it’ the time to buy. That is why its a good time to be a wholesaler.
As a wholesaler, you submit a contract on a REO property then after the bank has accepted your offer, you can “deliver” it to the cash investor. Yes I know that cash investors look on the MLS themselves. The key is to beat them to it. If you can spot a great deal and get it under contract before they do .. you win. The cash investor is going to have to buy it from you.
Many cash investors that are buying now are landlords looking for rental properties. Landlords also want to buy properties at cheap prices. This is why there is such fierce competition to find these REO deals. The key to success is about who can submit a offer t and get it approved by the bank first. Whomever has their offer accepted first means then can then sell resell it for a profit.
There are many cash investors looking for deals that when I send out an email to my buyers list they are usually sold to in less than 48 hours. I am seeing multiple properties get bid up substantially over their list prices. At the same time, the banks are becoming smarter and realizing that it does not benefit them to dump a lots of inventory on the market. They are now starting to release their inventory slower in order to change the supply and demand ratios. This is the best time in history to get started as a real estate investor or wholesaler.
What is Required to Submit an Offer.
A Proof Of Funds Letter POF)
Cashiers Check For The Ernest Money Deposit
Purchase and Sale Contract
We will cover these 3 things now.
Proof of Funds Letter
If you have cash available, you can print out a bank statement showing that you have the cash available to purchase the house. If you do not have the cash available then you need to find someone that does have the cash. You can ask a private investor or a family member for the cash to provide you with a proof of funds letter. Another option is to get a proof of funds letter from a transactional funding company such as Best Transactional Funding
Cashiers Check For The Deposit
You will need a minimum of ,000 dollar deposit in order to submit a purchase contract on a bank owned property.
Banks do not allow you to assign contracts. This means that you cannot simply put the words “and or assigns” next to your name and use an assignment of contract form. You are going to need to purchase the property in either your name, the name of a company or in a land trust. Land trusts may or may not work depending on how the bank feels about them. They don’t want to see you making money on their property
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