Working With REO Properties

Working withREO PropertiesMonica Main

Can You Still Get Foreclosures? Foreclosure Inventory is LOW Concentrate on Hooking Up with a Real Estate Agent WhoSPECIALIZES in Multifamily and Apartment Building Foreclosures Most Foreclosures WILL Be “Pocket Listings” Some Foreclosures Will Be FORMER Bank-Owned Assets NowOwned By a Private Seller Or An Asset Portfolio ManagementCompany You Can Get 0% Occupied Properties But It Is NOT RecommendedUnless You Want to Do EXTENSIVE Rehab I’ll Talk More About the “Secret” Behind This Shortly! We Are NOT Focusing on SFRs So DON’T ASK!

Short Sales or REOs? Choose Foreclosures ONLY Short Sales are HARD to Make Work! You Get a Better Discount on REOs

Introducing

A “Second-Hand” REO Is One That WAS Bank-Owned But Is Now Owned By a PrivateSeller, Individual, LLC, or Wholesaler Was Purchased By Someone Who Had NO IDEA How toRehab or Put the Property Back Into Service Could Also Have Been Purchased By a ProfessionalWholesaler Who Sells Former REO Assets They Bought in“Lots” Found That Buying an REO (Requiring A LOT of Rehab)Suddenly Became Much More Overwhelming ThanAnticipated Bought the Property from a Bank with Cash and Let It SitWithout Doing ANYTHING (or Much) With It Wants to Sell and Will (in Most Cases) Be Willing to Take aLoss on It!

Working With the “Second Hand” Reo is The NEW “Hot” Trendin Buying REOs!

This Could Possibly Work But ONLY If You Follow a SpecificStrategy Which I’ll Cover Shortly!

Contact the Listing Agent Find Out About MORE Listings NOT in the MLS AKA “Pocket Listings” They’ll Also Call This a “Wholesale List” See If They Work With an Asset Management Department At aBank If They Are An Asset Management Company Who Bought TheseAssets, Typically You Can Get These For NO MONEY DOWN You Will, However, Have to REHAB the Property

Otherwise Known As “Pocket Listings”

REO Funding Possibilities INCLUDES“Second-Hand”

This Includes Extended Transactional (“Wet”)Funders and Bridge Lenders That Specialize inAcquisitions & Rehab

This is Very Easy to Do!Create a 30-Day Posting on the Loopnet.comBIG BOARD for 149!

Quick Rules for Finding Investor Partners onthe Loopnet Big Board Put Your Ad Under the “Looking For Capital/Investors”Heading Look Professional; Ad in All Lower Case with MisspellingsWILL NOT Attract Investor Partnership Interest Be Ready With a Business Plan in a PDF File for When TheyRespond to Your Loopnet Ad You Can Provide a Link in Your Auto-Response Email to a WebsiteWhere They Can Download the PDF File OR You Can Have the PDFof the Business Plan ATTACHED to Your Auto-Response Email Make Sure Your Direct Contact Information is IN YourBusiness Plan (on the FIRST PAGE and on the LAST PAGE)

Find Deals for Other Investors, Get Up to 3% of theTotal Purchase Price, and Use This Cash for YourOWN Investments!

Since These Deals Will Be ReasonablyCheap to Pull Off CASHUnsecured Biz Credit

This Means That the Bank Who Holds Title to theProperty Can Give You Direct Funding by Opening Up aNew Mortgage on the Property!

You Hold All the Cards; TheyHold NONE!!

The Hottest Strategy Getting VERY SMALL Multifamily (Residential) Properties(Between 2 and 4 Units, Generally) Paying 100% Cash Using Business Credit to Fund Your Rehab (Mostly on BizCredit Cards) Rehab, Lease Up, and RESELL to an Investor Use the CASH from the Sale as a Down Payment for aPERFORMING Property

Financial Break Down Purchase for 4,900 Rehab Each Unit at 10,000 EACH or 40,000 Total Lease-Up Each Newly Refurbished Unit Resale Value After Rehab and Lease-Up: 115,000 Probable Resale Value: 89,000 to 99,000 Potential Profit: 34,000 to 44,000 Total Amount of Time to Acquire, Rehab, and Lease-Up: 45 to60 Days Worst Case: Property Won’t Sell (Right Away or At All) and isWorth a Bottom-Line Monthly Cash Flow of 1,500 to 1,800Per Month AFTER Expenses This Amount Can Be Used to Pay Down/Off Business CreditCard Debt Used to Acquire and Rehab the Building

If You Cannot Sell theProperty Right Away You Can Take Out an Equity Loan to Pay Off the HighInterest-Rate Business Credit Cards Loan Will Be Based on NEW VALUE of the Property (AfterRehab) Typically You’ll Get an Equity Loan Based on 80% to 85% ofthe Appraised Value of the Property Which is MORE ThanWhat You Bought/Rehabbed It For

The “Overall” Plan Buy/Rehab/Lease-Up and Sell Your First Property Buy/Rehab/Lease-Up and KEEP Your Second Property Every Other Property, Sell Every Other Property, Keep The Ideal Situation is to Have Your Every-Other Buy-andHold Property COMPLETELY PAID OFF with No Mortgage By Your 10th Property, You’ll Be Financially Free with NOMORTGAGES by Having a Pile of Small Properties Expense Ratio on These Properties is Typically 25% or Less!!

Get a Pocket Listing LISTFrom a Wholesaler

Then You Can Easily Get Anywhere from 25% to 50%Off Their Asking Price!!

Financial Break Down Purchase for 4,900 Rehab Each Unit at 10,000 EACH or 40,000 Total Lease-Up Each Newly Refurbished Unit Resale Value After Rehab and Lease-Up: 115,000 Probable Resale Value: 89,000 to 99,000 Potential Profit: 34,000 to 44,000 Total Amount of Time to Acquire, Rehab, and Lease-Up: 45 to 60 D