Involved In Real Estate · Portland, OR · Member since 2008 · 117 posts · 44 votes
I just finished reading the other thread regarding wholesaling FSBOs or REOs, and I've seen a few discussions here and there over the months on wholesaling REOs. And while this point is always mentioned, I just don't understand how it is plausible to pluck something off the market that is available to anyone with a pulse, pay closing costs, mark it up a few thousand dollars, and sell it off to another investor.
It would seem to me, someone that still has zero experience, that the end investor is a relatively informed buyer. So why are they paying an inflated price? What's the secret here?
Time is money - not all investors have the time to do the work you just did and are willing to pay for it.
Not all investors have the ability to pick out good homes - if you have that skill maybe worth paying for.
Investors can't see every deal - you might have seen one that the person your selling to just didn't see - lots of property out there.
If the numbers are right - does it matter to an experienced investor if you make money? To me - no - I don't count your $$ and you don't count mine - if the deal works at the price your selling it at - fine by me.
Time is money - not all investors have the time to do the work you just did and are willing to pay for it.
Not all investors have the ability to pick out good homes - if you have that skill maybe worth paying for.
Investors can't see every deal - you might have seen one that the person your selling to just didn't see - lots of property out there.
If the numbers are right - does it matter to an experienced investor if you make money? To me - no - I don't count your $$ and you don't count mine - if the deal works at the price your selling it at - fine by me.
There are many tricks to get to REOs first, or know first when a deal falls through. Some banks we work with initially price the asset to move quickly, usually the first one in that can get an accepted offer quickly can wholesale the property for 10-20k of profit.
REOs, to me, are mostly great for fix and flips, 15% or so you can tack on $5-10k to the price and wholesale.
Some good points mentioned above here. I would agree with what Scott said, if the numbers work most investors don't care. For me personally, if someone has a problem with me making $ I will delete their number from my list. I don't have the time or patience for people that are concerned with how much $ I'm making on a deal. The way I see it, if your passing on a truly great deal your basically putting money in front of them that they did not have to go out and find. Experienced Investors will understand that.
You can create deals on REOs by making offers lower than list. Most of the deals I get are not great deals at list price, I will come in and make an offer 10-30k below list, and then it is a deal.
Anson is right. The way to do it is have an angle and get them before they hit the MLS, otherwise it's all red tape and bidding wars. I'm looking to take that strategy nationwide...
Anson is right. The way to do it is have an angle and get them before they hit the MLS, otherwise it's all red tape and bidding wars. I'm looking to take that strategy nationwide...
Go out and meet the Listing REO Brokers. Actually you'll probably have more luck meeting the agents in their office which is just fine. The Listing Broker's job - sell his office to the Asset Managers, it's his agents jobs to get them sold. Build relationships and they will call you when they have deals you may be interested in. Remember, they get paid when they sell something, make their life easy and you'll both make $$.