Establishing a relationship with the bank

It is my understanding that banks usually work with investors that buy blocks of properties. This is how investors are able to obtain properties at deeply discounted prices. As a single investor, that doesn’t have deep pockets, and only wants to buy one or two properties here and there, how do I go about establishing a relationship with the bank and get these deals too? Is it even possible? I am seeing on my county clerks site where LLC’s are scooping up properties for 50K and selling them for 125K. Why is it so hard to get banks to work with the small guys?

Find a smaller bank where you can work with a person and not 8 levels of management. You can also talk to some Realtors. Some of them can find blocks of multiple properties that come along. Maybe you can purchase one or two of those while other people purchase the others.

Find that investor friendly community bank located in the neighborhood. Establish a good relation with your bank by transferring all of your deposit accounts there. Nothing gets a bankers attention more than money. Your money may catch their attention.

What you are talking about is Bulk REO Trading. Yes, it is very possible and doable for a smaller investor to get into this very profitable niche.
This is what I recommend to the investors I mentor:

  1. Go directly to the bank – no middle people or brokers (be aware of brokers offering their services for an upfront fee) – you get higher discounts and develop trust with the bank
  2. Have paperwork, information and money ready – you are going to need upfront a Proof of Funds Letter, a letter of intent and a non-disclosure agreement
  3. Make sure you know what you are going to do with the properties before making a commitment – most banks will give the potential buyer 48 to 72 hours to review the “tape” - a package of bulk REO will have properties scattered throughout a community or with larger banks across the Country (have your buyers set up and ready if you are going to flip them, or have your funds ready for the “cherry picked” ones)

Also start by dealing with local or regional banks or credit unions (portfolio lenders). Smaller packages to start with and without all the rules and scrutiny of the larger banks who carry government backed securities.

I would just do 1 deal at a time.

[font=Verdana][size=10pt][size=10pt]In theory everything you’ve been told so far is pretty much true. I suggest looking for the newspapers that advertise the foreclosures for the trustees. Maybe even look at dismissed bankruptcies for homeowners that know they have some changes to make. I suggest getting to know netronline.com website. Forsalebyhomeowner.com may have some homeowners looking to sell.

I’ve been a recovery asset manager for two of the largest banks in the world. I was told when I accepted employment w/the collection agency that I had the right to sell mortgage notes for Chase Manhattan Mortgage Corporation. This happened in 2004. The board of directors for this collection agency is Dave Kreisman & Gerald Shapiro. They are over 35 of the top law firms nationally. I figured out top to bottom exactly whose doing what in my area and nationally regarding the crisis so many are faced with today.

In all honesty its been a while since I’ve found bankers about making money in asset sales. Many people believe it’s easy to be in such a field. The reality in my experience is there is no one for the bankers to answer to. Fighting for my own home, and my right to an income in the fashion I’m accustomed to I found fraudulent court documents. That any amount of money isn’t good enough for them.

If you have an investor with $150,000 per month to spend on non-performing assets you’d think the bank would be happy to sell some NPN’s…In my experience this wasn’t enough for Citi. As they wanted the investor to spend $3-4m per month instead. So he couldn’t buy.

My other associate who is very good to me as well came with $10m-$50m per month to purchase deficiency balance notes thru Citi. This buyer ended up walking a few months later when Citi determined it wanted to make an income on the worst notes possible! So my ??? just what is the definition of SOLD?

I’M unaware of how many bankers your supposed to have within your hands to get them to do proper biz for the most part since all this has happened. What I uncovered is this law firm is astounding and may make you think before buying much.

With that said their beyond reasonable to work with most of the time. If you try to stand up to them for the GOOD of EVERYONE banker, investor, and homeowner your had to some degree if you think anyone will make them play fairly.

However, real estate is in the blood as they say and has been for several years. Currently, we’ve setup new financing mechanisms that could of helped everyone a whole lot more than the current system we have. Unfortunately, we’ll only be do bigger deals w/the asset deals we’ll be offering commercial investors. With that said the closer you can get to someone who controls the property such as the homeowner or an asset firm that maybe sells notes at a discounted rate keep your eyes and ears open. There are deals just not all of them are as easy as one would think!