Bulk REO's

[Adrian Rice]

Just curious what's the process like when buying and selling bulk Reo's is it as simple as wholesaling essentially as far as the concept goes?

[Jake Leicht]

Hey guys, thanks for posting about this topic. I have actually been personally purchasing hundreds of SFR properties nationwide from hedge funds and servicers on a monthly basis over the past 9 months or so.

Your assessment of the BS radar going off when you hear someone talk about bulk trades is true, however, that is due to the amount of brokers out there trying to make a quick buck by either remarketing product "posing" as the direct seller or getting a buyer to sign a fee agreement up front and then trying to go up the daisy chain to locate the direct seller. We call these folks "joker brokers" and I definitely get fed up with them as they make the industry very convoluted.

On the other hand, the bulk REO/Note business can also be quite profitable if the proper relationships are secured with direct sellers. My team has learned the hard way that screening, screening, and more screening is absolutely necessary before making the decision whether to enter a business relationship with a supposed seller. If one can get through all of the broker nonsense and get direct to the principal buyers, there is low competition, high discounts, and consistent product coming through the doors.

I have personally made a lot more money in the bulk buying business than in the open market buying one-off properties and have learned quite a bit in the process.

Happy investing!