Freddie Mac Foreclosure Properties for Sale

We would love to hear the answers to this question from those successful investors, too! We have put in a number of Freddie Mac and Fannie Mae offers, all of which have been rejected. We have been told that Fannie & Freddie don't negotiate much, but we aren't letting that deter us.

I also heard that the Obama administration has suggested that Fannie & Freddie need to get all those Foreclosures off their books, so maybe they will be more willing to accept lower offers soon. Each of the offers we have in to them are on properties that require lots of work, so investors will be the only people interested in them.

Good luck to you! Let us know what you hear back on your offers.

I tried to get some info. from the listing agent today about one of these properties. He said they were pretty flexible on terms, but the one I am looking at priced at $79,900 with a FMV of about 115,000, all he would say was if I put in an offer of $50K they would flat reject it. I wasn't thinking I would get it that low, but I was thinking of offering about 60K and see what they come back with. Thanks again... I guess as a beginner you just have to wade into this stuff and try to learn as much as you can as fast as you can.

Yes, we are still learning new things every day, too! It sounds like you are on the same page with us. We offer about 50% FMV on REOs (or less, depending on the level of repairs needed). One of the properties we offered 40% FMV because the place needed to be gutted and started over. The owner died inside and when we walked in, it smelled like the body was still in there! It was sooooo disgusting!! They responded back that they would NOT go one penny below asking price, which was $10K ABOVE fair market value. CRAZY!! We don't let any rejection slow us down, though. There are sooooo many REOs out there that there is just no reason to get hung up on one!

Good luck! We look forward to sharing success stories with you!!

I am also looking at a bank owned REO... it needs alot more work, but I'm wondering if maybe the banks are more willing to negotiate on price than Freddie Mac or Fannie Mae??? It seems like some of these banks might be in a bit of a bind holding these properties, while Freddie (the government) doesn't have to be in such a hurry to dump properties cheap... after all, they've shown they can just print money or tax more or whatever.. they have alot of resources compared to an individual bank. Would you agree? Maybe I need to focus more on bank REOs instead of Freddie or Fannie. Thanks for sharing and responding.. it is so helpful to talk about this stuff with someone else instead of just trying to figure it all out myself.

I agree that it's great to be able to bounce ideas and share thoughts with other investors! That's why this site has been so valuable to us!

I think that you are exactly right in your thinking about Fannie & Freddie. They have the luxury of just holding the properties forever if they want. At least that's what we have found and heard. I hope the rumor I heard about Obama wanting them to get some of the Foreclosures off their books is true. They have TONS of the Foreclosures in our area so if they would loosen up on them a bit we could definitely benefit from it!!

5H, I went and looked at the house I referenced above and discussed the house and Freddie Mac with the realtor. Can you beleive I stumbled on a realtor who SPECIALIZES in listed Foreclosures? I was so excited when I learned that.. I have emailed him and told him I would like to discuss a working relationship with him. He is supposed to send me a list of all foreclosures his company is aware of in my area today, many of which are not on the MLS! Anyway, he said Freddie Mac is "weird" to deal with. He said they probably would flat reject me if I offered in the 60's for that house; they might counter if I offered 70K. Then he said, if you wait two weeks and they drop the price because it's not sold, they may accept a 65K offer where they flat rejected your 69K offer today! So, what I took from this was look for Freddie Mac properties where they have not sold for a few months and they have dropped their price. Maybe those are the ones they will deal on! Hope you had a good weekend. Regards, David

ushodwc, you want to convey to the REO listing agent that you really want his "pocket listings" and you will pay cash and close quickly! Pocket listings are the listings that he has before they go on the mls, so nobody knows about them yet. By working with pocket listings you will always get the deals before anyone else. Once the agent puts the listing on the market it will already say pending because you had your offer in first.

Thanks KimmyJ for the info. on pocket listings! I have never heard this term before.. what is the advantage to the listing agent for giving me these? Is it a potential quick closing? I don't see how he will get a quicker closing with me than with other investors after he lists it, plus he may get a higher price from other investors than I will pay. What am I missing here? How do I sell this as an advantage to the listing agent? Also, I guess I need to find out how much the listing agent gets paid by the bank or Freddie Mac, for instance. Do you know? Is it 5 ot 6%? Could I entice them to provide me pocket listings by offering them a payout of something like $1000 for every property I buy that they bring me?

Also, I'm not sure I will be able to pay cash, unless I can arrange a buyer or assign the house... then I can use someone like Coastal Funding who will fund a double closing 100%, from my understanding. That brings me to another question I am struggling with..how do I get the house sold or assigned right on the back of buying it? It seems that most foreclosures I look at will need work, so a new home buyer is not likely to be the buyer before the work can be done, which may take a month or two to get it ready for sale, so then I have to go thru with a loan, and it seems hard to find 100% loan with no seasoning requirements. It seems I am more likely to sell to another investor and make a "wholesale" profit of 5, 10 or 15K, which is what I would like to do. But how do I keep another investor from bypassing me in the process once I have a property located... do I have to lock it up with an offer to purchase where I have a time frame on the offer and find a buyer within that timeframe? Thanks in advance for any advice you can give.. I really appreciate it.

Yes, you definitely want to get an offer accepted and locked up before offering it to your buyers, otherwise they don't need you! This is what we are doing also. Eventually we would LOVE to be able to buy, fix and sell properties or even buy, fix and rent, but until we get some capital built up we are focusing on this strategy. That's why we are working so hard on building up our buyers list. So far we have about 12 GOOD end buyers, each of whom want 60% FMV, varying amounts of repair work. Plus we have many "SO-SO" buyers. I don't include them in my "GOOD" list because it's hard to pin them down on what they want. They just say, "if the numbers are right..." So, we will of course offer them any deals we have, but who knows what they are really looking for!!

5H - thanks for the response. So your buyers want 60% FMV, so you have to target about 50% FMV and the buyers take on the repair work for you to make a profit. Why wouldn't your buyers just bypass you and try to lock up the deal themselves at 50% FMV? Are they unable, or are they just willing to pay you the fee to do the legwork, lock up the deal, and drop it in their lap? Is it just not worth it to them to spend the time to get the 50% FMV deals? Just trying to understand the buyer's perspective so I know how to target them. By the way, how did you find your buyers? Thanks for all the help.

It's funny to hear you asking those questions!! I wondered the same exact things when we were just starting. I thought it would be impossible to find people who would be willing to pay us to do something that they could easily do themselves. What I have personally found through our experience with finding buyers is that to them it is well worth the money to not have to spend all the time it takes to find these deals.

To our buyers, a deal is a deal. As long as they are getting a good deal, in which they will make a lot of money, they don't mind paying us $5-10K. One of our buyers does about 2-3 flips a week, so he doesn't want to spend time finding deals.

We have found our buyers in all kinds of ways. Some were found through Craigslist ads, some we found at auctions, some through word of mouth. I found one while looking at a house we wanted to offer on. I saw his truck parked next door, rehabbing that house. The writing on his truck said "I Buy Houses," so I wrote his number down and we called him. He is a big-time flipper and has told us to send him any deals we have. I guess we're just always on the lookout for deals and buyers! You never know who you will meet and where.

Wow, so you thought the same things I did! glad to hear that. I live in Texas, and there is a very large group here that advertises EVERYWHERE that they buy Ugly houses, or houses in any condition for fast cash closings! I don't know if they fix up and flip, or what, but I intend to call them and see if they are interested in this concept! Thanks for the tip. I am learning so much here, I can't believe it! thanks for sharing what you have already learned. Have you approached listing agents about their "pocket" listings that another poster referred to earlier? I didn't get a reply on that one... wondering why a realtor who lists foreclosures would give me the list before they are public. I was thinking of offering them $1000 fee if I succesfully purchase any property from attaining the "pocket" list early. What do you think.. could this strategy work?

I've never heard of pocket listings, but KimmyJ is very knowledgable about these things! I would think that if you were lucky enough to get hooked up with a listing agent for REOs he should make you aware of them as soon as he gets them. He will get his commission on any deals you get anyway, so I don't know if you would need to offer him the $1000. That's just my opinion, though, and there are LOTS of people on this site that are much more informed than me!! You are lucky to have found an REO listing agent that is willing to put in lowball offers. All that I have met are practically offended by our 50% offers! It should benefit you a lot to have that "in" with the banks.