BULK SALES - (NEW Forum Topic) - Ask Anita

Purchasing bulk real estate is a concept that is becoming more and more popular and is similar in concept to a group of doctors banding together to get lower insurance rates. If you join together with others in an investor group to buy bulk real estate, you increase your profit potential while at the same time lowering your personal financial risk.

Buying bulk real estate is the process of buying multiple pieces of real estate at low prices as part of an investor group. Many builders and developers are eager to sell bulk real estate so that they reduce their holding costs and also their own risk of investment. Builders want to know that all of their units have been sold so that they don't experience a loss. This means that they are often willing to sell bulk real estate to an investor group so that they know all sales are guaranteed. This concept is a great way for an investor group to achieve tremendous prices for real estate property that bought individually would have cost them much more. Higher prices mean less property purchased which in turn increases the risk factor.

Buying bulk real estate is as easy as teaming up with other investors who are interested in buying the same types of property as you are. These other members of your investor group can include friends or business associates. If you don't have any immediate contacts who are interested in buying bulk real estate look outside your circle of acquaintances. There are many investors who will appreciate that you want to do business with them. It's up to you to find an investor group that meets your financial goals as well as your long term business goals.

There are buyers and sellers for almost all bulk real estate deals. If you are serious about investing in real estate it's important that you find an investor group that works for you and focuses on the type of property that you want to deal with. Bulk real estate is a great way for you to become a hardcore investor in real estate.

exerpts from getconstructiondeals.com

REO packages are real estate owned pieces of property that can be bought in bulk at very low costs. Many people who invest in real estate often look for
these bulk packages. Once they are purchased, the owner is able to sell off individual pieces of property making a large profit. This form of investment is one of the most popular and attractive methods of investing. The bulk roe packages are results of foreclosure processes in which the lending company owns the property. As many people are aware, foreclosure property is sold at a much lower cost than regular real estate. This is why buying reo property in bulk can be so advantageous. It allows buyers the chance to purchase multiple properties at a price that will allow them to make a profit upon resale. Bulk investments are a perfect opportunity to double your investment in a short amount of time.

Most banks will offer reo sales, and many times a bulk purchase will be available. Thousands of investors chase these bulk reo sales across the country, looking for the best buy that will yield them the biggest profit. There are some things to be aware of when looking to buy reo. First, if you are not familiar with the way banks handle reo sales, it may be in your nest interest to hire a buyer's agent. They will be experienced and knowledgeable in all aspects of the purchase. You will work with the agent to find the best purchase. The agent works for the buyer only and will work to find the best possible deal. It is possible to negotiate with a reo. This is more common if the listing is older. The longer a listing is available, the more anxious the bank is to get rid of it. They may be willing to drop prices significantly, especially if you are buying in bulk.

Keep in mind that most bulk reo packages will be sold as is. This means that you will have to put some time and money into the property if you want to make a decent profit upon the resale. Bulk reo property investing
is perfect for those who have an unstable financial future. Buying these homes in bulk will allow you to live in any of them without worrying about being foreclosed on if you cannot make the mortgage payment. This is true because the cost of the home will be drastically less than the value of the home, thus making the mortgage rate much lower than a traditional mortgage. Investing in bulk reo property allows almost anyone the ability to purchase homes at a low cost and have the opportunity to make huge profits by reselling them.

If you have the time and the resources, try to do a little research before making the commitment to purchase. The bank will not be able to provide the history of the home. This means you will not know what repairs will be needed or which have been done until you have the home inspection. By looking up some public records, you will be able to get a good idea of the condition of the property before you purchase it. This may save thousands of dollars in the end. Try to gather as much information on the properties as possible before making the bulk purchase. Also, keep in mind that when you buy reo properties in bulk, you will be responsible for all the properties once the sale is final. This is a lot to manage, so make sure that you have the resources to do what needs to be done. Buying reo property in bulk has been a great investment opportunity for many people. It is especially beneficial to those who cannot afford to purchase multiple properties at listed prices. The banks are usually eager to sell off these foreclosed properties at a great price, allowing you the potential to make a large profit.

Sources:

About.com Buying Foreclosure REOs http://homebuying.about.com/od/4closureshortsales/qt/120507_****.htm

What is the job of the Intermediary "middle Man"?
Can you give the order of paper work needed.
Here's my questions.
I see the buyer needs to fill out a profile form NCND & MFA "master Fee Agreement" & I need to get my name on the MFA to get paid.

1.) Sending the Buyer the profile form, shows the Investor's website who's getting them the package? that makes me think, why wouldn't they just go around me, unless I got the MFA signed 1st, but that also has the company's name on there also. I'm trying to learn this process, so I can be professional on getting the paper work from A to B & knowing what I'm doing.
Am I making any sense? please clarify, so I can get this done, as I have a Buyer in place.

Thanks!

Actually Jason...NO...you never make sense..lol...just kidding

An Intermediary is basically the person that brings the buyer and seller or their representatives together. They are paid typically 1% (to be split within the intermediary pool) for their part in the deal.

To secure your spot as the intermediary, you need to make sure you have the Non-Compete Non-Disclosure (NCND)SIGNED by the party for which you are presenting the deal to (buyer or seller).

You then need to have your buyer issue a Master Fee Agreement (MFA) with you listed as intermediary. You do not have to put your banking info on it until it is turned over to the title company/escrow company. This is how you get paid. It must be signed by ALL parties involved. The Buyer, Seller, Intermediary(s)etc...

There are many things that happen in the interim, such as providing the listing of properties, the due dilligence period, etc...

As far a the buyers profile form - (From my site) this is what I require in order for a new buyer to do business with my company. It gives me references, history, finacial viability and a clear sense of whom I am doing business with. Not all companies have that policy.

I hope this answers your question.

Jason if you dont already have the forms you need you can google them

Hi Anita, I always enjoy reading your posts, very informative. Where can I go to get more info on Bulk Purchases?

I just had one come my way yesterday

Medium rehab bpo $9,200,000
Asking about 25 - 30 % of BPO price

150 properties
a variety of different states (mostly midwest / southern states)

POF / LOI need [if interested]

2nd options is
16 - 19 properties bulk in Peru , Indiana
light - medium rehab (mostly light)
if interest , pm
POF / LOI

Hi Anita, Here's my situation. I was just contacted Friday from another investor who has just started with Bulk REO's. He is getting them for $.30c on the dollar off the BPO. He said he wants $.40c on the dollar. I have a buyer lined up who is willing to pay $.50c on the dollar. Is this type of trans action possile? And if so, What forms do I need other than the POF letter and what is the prceedure? Also, how long does this transaction take from start to finish typically? Thank you.

How many people on this website do you actually believe can buy a bulk tape? I am just curious as perhaps your information on the demographics of this website are different than mine. Thanks in advance.