Friday, April 30, 2010

How to Find and Close Bulk REO Deals By Duncan Wierman

Many people think that closing a one billion dollar bulk REO transaction is an everyday occurrence. People fail to think about the real implications of this. Do you honestly think that your regional bank has that many distressed assets? Have you stopped to consider the amount of property this entails?

Many new people to real estate investing are also are under the wrong impression that using words like 'billions' will get you more clients. Packages of Bulk REO deals over 100 Million are not common. The majority of bulk reo packages range from as little as one hundred thousand dollars (100K) to ten(10M)million dollars. These packages contain from 5 to 200 pieces of property. This means that many more people can take advantage of buying and selling bulk reo assets. Lets take a look at how.

The first technique is to create and maintain a good relationship with one or more banks. Getting to know the correct people in the banking organization is the first step. Regional banks and credit unions are a great place to begin. A great relationship with your banker may take somewhere in the range of a few weeks to a few months. The perseverance you invest in creating and nurturing a great business relationship, will truly pay off like no other relationship has.

Your goal is to get to know how the bank disposes of bad assets. There usually is a person in charge of the supervision of REO disposition. This is the person on the top rung of the ladder in charge of REO sales. You want to get know them on a first name basis!

Once you are introduced, create good rapport as much as you can. By this time, you will need to have a large financial backer with liquid funds for you to use for the specific purpose of closing an REO deal. You will not build trust if you do not have adequate proof of finances. Once you hear of an package of assets for sale, you need to quickly to make sure you are ready to close a deal. Timing is key, and if you delay for even an day, you may not get the deal. These types of deals are hot and news does travel fast.

If you know how the bank reports their financial reports, will also help you in putting together your offer. Banks want to report good financial earning and remove bad assets from the books before reporting. Once you know the bank schedule for the end of their particular financial quarter, visit them a month before and get the word out regarding your interest in purchasing REO property they may have. Once you get a total perusal of what they have available, make an offer. Make sure you give your next highest offer and not your best offer in the beginning. You need to leave room for negotiations. However, once the bank has acquiesced, close the deal immediately.