Don't Waste Your Time On REOs

I am feeling you on that one

Fuzzy and vague at best. You provide no details or numbers with your claim. I'm not saying no one is buying REOs, what I'm saying is that you will buy them either equal or slightly below FMV.

Banks are in the business of making PROFITS. They are professional money makers, why would they bother with small time investors.

What Anita is referring to is bulk sales. Wholesale purchases. Minimum of 10. If you can do that, great for you, but I'm talking about the average guy...you, me, and most on this forum.

Just like at auctions, banks deliberately list very low. It's the oldest trick in the book. It piques interest and the bidding war starts. Same goes for short sales. Although it's listed very low, banks know that it will rise to FMV once the word hits the street.

Does it matter what state or city I find the deals? Give some ideas as to what you would like me to find and I'll do some extreme searching in my area which is on the Alabama Gulf Coast. Thanks and I would love to work with you to create a win/win all the way.

Yes of course they're prevalent....but what good is that for you and me?
You can never get it much below FMV.

Try to lock a few up and we'll talk again later.

We have only bought about a half dozen REO's, last year, & got some good deals. But, in the last 6 months it seems the banks have gotten more "cocky" on the offers...not countering, or if they do, dropping only $ 1000 or $ 2000;
sometimes not even responding at all. I don't know if it was because of the help of the "bail out money" or what, but I do know that is a numbers game. I have seen properties get so many multiple offers even here in Fl., that the sales price can go to 20% over the listed price; & these are "CASH" offers from fellow investors. We thought that after all the local investors "blew their wad of cash" it would go back to normal, but now out of the area investors are doing the same thing. Sadly, there are no REO's that have been on the market for any length of time either. This is why we all have to be problem solvers & look to the FOBO's, Probates, Short Sales, & Sandwich Leases. Gary/Jill

I'm with you. The settled price is usually very close to FMV. I suspect uninformed buyers are paying too much. Also, owner occupied buyers are really not looking at the profit margin. They are looking for a place for their families to live.

However, short sales are not any better. For the same reasons above, they usually sell for somewhere very close to FMV.

Purchased last week for $35K with OPM, closing next Monday with a cash buyer for $40K (I didn't do a thing except show it to him and then give him the lock-box combo). He wants 5 more after this. Then I'll move on to the next buyer on my list. Gotta love REOs in my area. (Not to mention my agent is a REO agent so I get first dibs, even before they go on the market).

Rina

I just read this entire thread. Lots of good information and many perspectives.

I really have no place here to respond as I have no deals yet. There are many on this thread that know much more than I. I live in the same area as Jake (JGREER). We live in an area that didn't skyrocket on home valuse/prices.

But here goes: I do know from what a realtor told me that some banks took out insurance on these loans/properties (it'd be interesting why they did that knowing loans were being issued that individuals really couldn't afford)or maybe it's just what they do on all their real estate loans. I guess you'd have to ask and research. Find out which banks are holding; is it the same bank or find the properties that have different banks. Follow what Joe and Stacey have done contacting directly the asset manager. Also I like what Greg Murphy does is look at the FSBO and expired listings to get to them before the foreclosure or even before the short sale; look at lease options. I am trying to do that more.

I think also moving on is good advice. REOs are out there. I found many on this site buy in other states. When I was in FL it was very interesting to know I could buy a property there for the same as in the QC (quad cities). It was amazing to me that values dropped significantly; one seller they called at this training live bought at like $359,000 and the comps were only like $150,000 to $175000 now.

Sorry for the long message.
Blessings to All,
Cathy

Rina wrote:

Gotta love REOs in my area. (Not to mention my agent is a REO agent so I get first dibs, even before they go on the market).

Rina

What's does first dibs have anything to do with it. No one is pulling the wool over the bank's eyes. Yes you may know before others, but that does not mean the bank is naive enough to accept the first offer. Nor does the agent have a magic wand to hypnotize the asset manager.

I'm guessing that some of you are thinking that banks are naive and do not know what they're doing. As if they're in another profession and all this financial mumbo jumbo is out of their league.

most of the REOs here are owned by big banks out West. They have no idea what these properties look like nor do they care. They just have their national RE agency hire local agents to represent the properties and get them sold. Now that I think about it, it's the big banks that seem most ready to get rid of these properties. Works really well for me. And I do think my agent has a magic wand. Between that and lots of offers I am doing pretty well. lol

A friend of mine just got a great deal on a REO in FL for $48K. New 3/2, just needed a fridge. Of course he bought it owner-occupied with FHA financing, but I was pretty proud of him.

Rina

The market will correct itself no matter what. If the banks are out here in the west, I'm sure other local investor in your area will start out bidding each other and eventually increase the prices. The banks will taken notice and everything will fall into place.

I don't think there is a stone unturned in our enlightened age.

California is a hard place to invest alot of competitions here...A Reo alway ends up in bidding wars.

But just make offers eventually you would end up with some...Try to get in with a reo agent they will help you...

Ive made offers on properties that have hit the market the first day with multiple offers already. But made offers on acouple of properties in LA county and i have gotten them..Its a numbers game thats all.

I just want to comment here Anita ask you to send your info and she would call u and your snappy comeback was "you only ask for one favor etc etc" I don't think you understand the gift she just offered you, nor the gift of information Rina and Jay put forth. These aren't a bunch of hacks getting by on one or two deals and offering you information. They not only talk the talk they walk the walk. You would better off to listen and learn from them than strike out at them. This business is all about relationships becareful of the bridges u burn.
Donna

Sorry Jake my fingers failed me when I typed Jay forgive me;)
Donna

Just get on and get in the game. I agree with Donna and Rina.

Just study your market, Learn what moving fast and whats not, Sometimes you will have to get properties were others wont...

Dont concentrate in one spot move around different markets make offer,!!!

You know someone said "It's a numbers game" Well so is the lottery. I live in San Diego County and I have to agree with SoCal. Where are all the deals with REO's, Short sales and Lease Optons? I have spent months chasing Lease Options to no avail. No one is interested in them. Does anyone have any specific information to share with fellow DG famly members, or are we all just fooling ourselves. Numbers Game is fine but there has to be a reasonable chance of succeeding, don't you think? Again I ask, who has been successful with these techniques in California? Just once truthful and informed response would be enough for me.

Thank you,
Michael

I live in LA county
I focus mainly on FSBO, vacant homes, distress properties because there is not much competition there.. If your not having any luck with REO stop going after them... concentrate on FSBO..Put bandit signs,,Go to investment meetings,, Put ads on classifieds and newspapers... Do probates,,,

There are more oppurtunity out there,,,Not only REO's

Call every REo agent you can find and screen them see if they will help you

Move on! and if you cant seem to do that then maybe this is not for you. Asking for examples is fine but lets face reality. If someone isnt doing it then WHO is!

I AM....let me repeat that for you in case you missed it... I AM!

and not just in bulk...as I have said repeated;y.....singles as well. Get off your butts and get some sense. Whining is wasteful. If you dont have the motivation to reaccess your situation then go find something else to do and stop trying to discourage everyone else!

WOW!

I agree with Anita

Nothing comes easy you will have to work for it...

Just be determine I have had succes with REO s...

Anyone here can do the same thing as i did

Anita,

With all due respect you offer no specific examples. None. Do you invest in California property and if so can you tell us what techniques work for you?? That's all I am asking. Too many of us have spent too much money and valuable time on methods that we were told would be profitable but were just false. Dean addresses these specific problems in real estate investing in his books. We're just trying to get to the truth here,that is all. I look forward to any positive subject specific information that you may be able to share.

Respectfully,
Michael

.

If you want eamples on what I have done - research my profile. I have posted lots of examples from deals - just as others on here have. An with all due respect to you.....its all there in black and white.

If you are spending wasted time on strategies that are apparently not working for YOU - then once again, I say re-ecvaluate your strategy and try something new. Sometimes it can be as simple as looking at another zip code.

I am not going to respond to anything else in this thread because its pretty useless. There on some that have responded that are not seeking new ideas or information - they are only trying to discourage.

Just because it did npt work for you and some others does not mean it does not work period. Guys if you want you go get it - a few no's will not stand in your way. At least it didnt for me.

If I sounded irriated in my prior post - I will not apologize - I was and still am. I did it on my own and did not complain. When I hit a road block I took a step back and found a way around it. I did not go looking for examples or step by step instructions - what was the point.

If you cant take initiative for yourself - whatever someone else provides will do you no good either.

REO's were profiatable when I started and are just as profitable today. Deans new book Profit in YOUR TOWN - if you have not read it - then go check it out. It may help a lot of you realize that it does not matter where you live but that you do the work.

I live and buy in California and do it on a very regular basis. Not just for me but for others as well.

California REO's are no different from any other place. The banks are the same banks are the same one that do business in every other state out there. So you have more competition here - big deal. Life IS a competition. Dont wait for things to come to you! CREATE YOUR OPPORTUNITY AND TAKE IT.

Good luck to all that have posted here and I wish you all much success.

Jude, I couldn't agree with you more. By the way, what happened to Jude's entry? I can't find it. Too many of us have been lied to for too long. It's time that it stops. We all hope that Dean is the real deal because all the rest of those real estate gurus were bold face liars that belonged in jail. These are desparate times and we all deserve to hear truthful information about what is and is not possible in real estate today. And one size does not fit all. I think that's why people are inspired by Dean because we desire the truth for a change. Why is it so hard to cite specific examples? I just don't get it.

I tell you something good,.... no, GREAT I got from this thread?

1. I learned a lot about diversifying your strategies.
2. How helpful people at DG.com are.
3. REO's might not always be in your own neighborhood so change your strategy.
2. That Rina has the patience of Job.
3. That Anita is a pro at the wheel and I hope she puts that knowledge in a book someday.
4. That some people will always see the glass as half empty.... Well... I already knew that one. That's okay. Sometimes that oil and water mixture brings people's passion and compassion to the surface and you can learn a lot when that's happening.

Wishing everyone a sigh of re-leaf.

Blessings,
Barbara

Rina wrote:

Purchased last week for $35K with OPM, closing next Monday with a cash buyer for $40K (I didn't do a thing except show it to him and then give him the lock-box combo). He wants 5 more after this. Then I'll move on to the next buyer on my list. Gotta love REOs in my area. (Not to mention my agent is a REO agent so I get first dibs, even before they go on the market).

Rina

What area are you in? I would love to start looking there for REO's if they are done that easily!

VVOVV

smash the dream

REO's are bad Nothing could be further from the truth

I have heard from friends that cali especially so cali has become a bidding war

change stragegies and move on

other parts of the country things are not so bad I went to an auction in portland or and most properties were going at about 50 to 60 per cent of old list price most of the properties where doable

anyways sad that because we have a bad experience some where it must be true every where
hope this helps you

never be discouraged or like dean says " dont you dare stop"

later

Forget the dream. Let's deal in reality for a moment. Does anyone who invests in California use the Instant Equity Exchange with any success? A simple question!

All I can add is that I just started about a month ago and I am already finding out he who gets there the fastest with the mostest wins. Are your offers submitted with POF? I am getting some turned down, However I am getting some counters and it looks like we have one accepted.

My finding is that in getting started you are correct. I gotta pick up the dregs that everyone else has passed on. OK, I get it. Got two that will work. However, in the future, I can see you gotta show up BEFORE FORECLOSURE OR AUCTION, and be a salesman enough to pay off the debt and work the equity to your favor.

Is it gonna be easy? NO! Am I gonna quit? NO! Am I gonna pick up the dregs and find a way to make them work? YES! Am I gonna hammer the bank for it sitting on their rolls since 10/2009? YOU BET YOUR BUTT!

Please keep up hope. Go get what you want, and if what you are doing is not working, change it. I am sure that someone in SoCal is doing this and doing it well. I dont suppose to guess a market I don't know. But this I do believe, somebody is doing it and all day every day. Find out what they are doing. If you have the money to invest, as it seems you do, figure the angle thats keeping your attempts from getting through.

Best of wishes!