Getting a bank to Finance an REO!

Once you work with the local banks try to structure win-win deals, you will probably have more REOs brought to you down the road. The key here is there is more value with building a solid relationship with the bank asset manager than trying for one great deal. Try to dtermine who the final decisin maker might be. I nsome banks it could be the aset manager, in others, it could be the President of the bank. Small banks sometimes have more flexibility in wha they can do and can often do more than they may elude to.

When making an offer the best advice is present it in an email. This gives the bank time to consider it without coming back with an initial "no". You can just list out the price and all the "other terms and conditions" you are looking for in a regular email. You can even include more terms/conditions than you want and use these are bargain chips if necessary. You always want to get title insurance even on a bank REO to ensure their or no other issues that might arise.

Once you reach an agreement you can draft up the formal contract or purchase agreement. The contract is just a meeting of the minds of 2 parties and can be as long or short as you need. Just make sure all the appropriate information is covered to ensure a smooth closing. A real estate attorney could probably be of assistance here. Good luck with this potential REO deal. Believe and Achieve! - Joe

Each bank may have a different "hot button." The best advice would be to feel out a bank on their hot buttons and it could be a higher price or a higher interest rate. Some good advice is prepare a summary with your offer of the bank's carrying costs such as taxes, insurance, utilities, upkeep, security, etc. This summary fo additional costs could motivate the bank's decision maker to take a closer look at any offer you might submit. If the bank gets what they want, and the buyer gets what they want, its a win-win for everyone. Believe and Achieve! - Joe

Thanks for the nice comments, I appreciate it. Good luck on all your current and future deals. The next deal might only be a phone call away. Believe and Achieve! - Joe

The larger banks are harder to deal with because they may have a formal process of liquidating their REOs. Some of the larger banks sell off bulk packages of REOs of have them go to an auction. If you can determine the bank's process you may be able to try to make some contacts along the way.

Talk with the listing real estate agent for these types of REOs and see if they offer any insight. A valuable tip is if the real estate agent knows the property will soon go to auction, you could make an all cash offer if you have the resources or could get the resources to pay all cash. The bank may take the (low but agressive) offer rather than go to auction. This is the time to craft a good but an agressive offer.

Another approach to consider is contact all the small local banks and credit unions in your area. The smaller institions, usually with a total of 5 branches or less, are a little more motivated to deal and get these REOs off their books. They may even offer 100% financing. Take each call and each contact as a learning experience and a chance to build a relationship for a future contact. Good luck with your REO investing. Believe and Achieve! - Joe

gary i am in ny and am part of deans program , i am a roofing contractor for 28yrs call me and i can help you with proof of funds steve www.ansslate1@****

Hi Joe,
I was wondering Joe I am little confused. If you give the bank comp. Would they get an idea of the price of houses are selling for and how would you be able to get it at a good price and still be able to flip it for a profit .

Thanks,
Reuben

Thanks for stopping by the forum. I gave the bank comps that were on the lower end of the fair market value for the home. If you the average 3 bedroom 1 bath home in an area the prices are usuaully high medium and lower end. Also, I wanted the bank to finance 100% the REO purchase so I could hold this property as a long term rental. Thus, I could pay more if I got low interest rates to finance it. Good luck with real estate investing. Believe and Achieve! - Joe