Can you wholesale bank owned/REO properties?

Question

I was recently reading a email about wholesaleing bank owned/properties. Is this possible? If so is it a easy process?

Ruth Bayang · Answer

You can't assign a contract on an REO. But if you are using your LLC to buy it, you can sell your LLC.

Russell Brazil · Answer

Account Closed Fannie and Freddie will actually place deed restrictions on a property so that you can not sell the property at all for a certain amount of time after they release the property.

Chad K. · Answer

@Russell Brazil @Brian Cam Adrien Schebott thank you for your feedback, it sounds like I need to get more funds.

Anthony Largie · Answer

To answer the original question... "is it possible" . I can say definitively YES! I just closed one in New Jersey a couple weeks ago. It was not a smooth transaction by any means but I double closed it.

Shari Peterson · Answer

With REOs, usually you are not able to "assign" the contract. They won't allow you to write the purchase contract with you as the Buyer "Chad Kennedy and/or assigns". This means you need to actually close on the transaction with cash or transactional funding before you can sell to a new buyer. If you plan to sell the property to a buyer who is getting an FHA loan, FHA will not approve that loan until you as the owner of to  property have owned it for a minimum of 90 days.

Anita Fofie · Answer

Most commonly with Fannie Mae and Freddie Mac at least you cannot resell the property for more than 120% of the purchase price within the first 90 days. That means that if you purchased a property for $100,000 you can sell it for $120,000 the same day but not a penny more. If you want to sell it for more you'd have to hold it for 3 months which cuts into your profits and in many cases defeats the purpose.  With most deals I've found, the 120% rule gives plenty of room for a healthy wholesale fee after you deduct your closing costs.

Hope that helps.

Phil Z. · Answer

Some you can, some you can't.  You'll need to see all the addendums.

In general it's best to stay aware from banks when it comes to wholesaling.  The ideal wholesale deal is one you buy cash and resell for cash.

Adrien C. · Answer

you can wholesale anything you purchase w your cash. Can not assign (at least to my knowledge) a REO.

Chad K. · Answer

@Shari Peterson Account Closed I couldn't see your email please give me a email at [removed email address]

Account Closed · Answer

Typically banks will not allow you to assign a contract on a REO.

Can you wholesale bank owned/REO properties?

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