Finding buyers for a double close

[Kristen Bottger]

Forgive me if this question seems totally amateur, but where/how are you all finding your end buyers to do a simultaneous close on the REO you are buying from the bank? How do you market a property you don't own?

[Jon Holdman]

Very difficult to double close to an end user. You really need to find buyers with cash or cash equivalent (i.e., loan on another property, hard money, their own investors, etc.) A conventional lender will have issues with a double close. They will run a title search and discover you're not the owner. Then, they will want to know what you're paying, and use that as the basis of the loan, rather than the price your buyers are paying. So, the buyers will have to come up with your fee in cash. Or, the lender may reject the loan altogether. Not impossible, but be sure your buyer is aware of what's happening and makes their lender aware.

Right now many buyers are using FHA loans. Those have a hard and fast 90 day ownership requirement for the seller, unless the seller is a bank. If you could do an assignment, it would work. But, banks will not let you assign a REO, so that doesn't work.

They call this wholesaling for a reason. If you want to retail the properties, you really need to plan on holding them for a bit.