All Forum Posts by: Jeff Fairchild

Ok but I mean with you doing a double close to get around the fact that they don't do assignable contracts.

Do you guys find there are a lot of other investors on these lists that the agents give out of new Reo's and that it is a race to beat them? Is there a way to get to the listings before other investors?

Are you guys generally financing these reo's with hard money? If so, does the agent require that you have a preapproval letter from the hard lender before submitting your offer?

Is there earnest money involved in a contract for an reo?

If an agent gets a new reo list and there is a property you want to make an offer on, do you usually have the agent show you the house and you just estimate repair costs while looking at the house right then? If you are wholesaling do you just use your estimated amount when making the offer to the investor?

Are you able to tell how long the listing has been up to know when it will hit 90 days if you weren't around the 1st day it was listed?

Is it best to contact every reo real estate agent in town and chat with them and have them send you their updated list? Do most agents email a list to people every day? What should I talk to these agents about when I tell them I want to buy Reos? Will they wonder why they should work with me over another investor? Are they earning their whole commission on these deals?

Are Reo wholesalers who are selling their contract to investors using hard money loans?

I guess most of the time the investor would be buying it and they would only use the loan if they couldn't find a buyer.

Are the banks willing to wait around while you search for a buyer once you have it under contract?

Are they willing to wait around for your buyer to get conventional financing?

How are these people getting rid of 30 Reo's that they buy all at once so that the interest from cost of funds to acquire them doesn't get huge?

I recently read the book Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth by Larry B. Loftis. He is a real estate lawyer and investor and he says that he definitely does not add "and/or assigns" after his name when assigning contracts. He says that puts a big red flag up and he just checks a box on the 2nd page or something where it has legal wordage that it can be assigned. This is just general info, doesn't relate to Reo's.

Do you guys agree with that advice?

Here is a way to avoid the seasoning issue. I found this on another site's forums:
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"Rather than assign, or double close, here is how we do these.

1. Have the closing attny/title company prepare a new contract, one between the sellers, and your buyers, for the buyes agreed price.

2. Have the title company prepare a 'release', which you sign at close, releasing the sellers from their contract with you, for a fee equal to your profit. (the price difference between the original contract with the sellers, and your contract with the buyers.)

You then get paid at close, to release the seller from selling to you as agreed previously.

This helps avoid title seasoning issues with the buyers lender, as they might want to see the seller in the transaction hold title for a year, sometimes less.

Also, most lenders will not allow an assignment fee to be paid out of loan procceeds, so the above method avoids that issue as well.

A bonus to this is one set of closing costs, instead of two as per the double close.

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Well, I can see both sides of this one. I think the best option would be to really get a feel for what investors in your area are willing to pay for deals. Lets say they use 70%-repairs. Then you've got a 12k deal on your hands in my opinion. What if you don't get any more deals as good as this, you will have missed out on your only big payday of the year.

If you want a lot of info on subject to/lease options and when to use them check out wendy patton's book.

Yea, I'm thinking that probably would have been a better option, but not if it was her first purchase and she was dirt poor, then possibly the $7k instant cash may have been a better option.

p.s. Its funny how you think that employees/owners of snickers or home depot would be reading your post and caring whether you added a TM to their names. lol