Help! Is there a way for me to wholesale REO's?

Here’s my dilemma,

I have a bunch of rehabbers looking for some good deals, but are too busy to look. There are some pretty good REOs in my area. However, I can’t even begin to negotiate with the banks until I can show proof of funds in my bank account. Originally, I was going to use Coastal Funding to set up a double closing, and they sent me a proof of funds letter, but since the funds are not in my account and I can’t get a line of credit extended to me from Coastal, my agent won’t even present my offer because it doesn’t meet the requirements which are A) a mortgage loan or B) an all cash buy. What should I do?

You have three choices:

First, have you considered getting a mortgage broker to supply you with a loan pre-approval? If you can get one from a mortgage broker you can submit your offer, get it excepted and substitute in escrow your hard money loan for your conventional financing.

secondly, you can try to get your local banks REO list before they are listed?
You circumvent a listing agent, and generally you are dealing with a different department at your bank.

If you are very professional they may never ask for “Proof of Funds” because your moving for a quick close, generally seven to ten business days and because your dealing with an entirely different department than listed REO’s would be processed and handled in.

Thirdly, you may consider looking for the Real Estate Auctions in your area?
This is where REO’s that were either listed and did not sell in 3 to 6 months or properties the bank or lender need to liquidate quickly are sent for quick transfer and change of disposition.

The REDC is one of the largest property auctioneers in the country but not the only one, take a look, the auction rules are only a non-refundable deposit for each property you successfully bid on and a set criteria and time line to close. Check with your local auction company for details.

Realtors(agents) are required to submit all offers. Get another one.Herbster

Real estate sales agents are not required to submit an offer if that offer specifically violates a term or condition set out by the seller in the listing contract. Most likely the banks selling these REOs put in the listing contract that all offers must be accompanied by pre-approval or cash so if the buyer does not have these the agent is not required to present the offer.

What banks have the REO’s? There have got to be others that aren’t so hard to deal with. Sounds like these banks are not too concerned about moving their properties.

What they are concerned about is wholesalers and worthless buyers tying up their properties and then walking away at the end. Haven’t you noticed the trend with these Reo’s?

CW wants you to be pre-qualed through them on their listings. Same goes for Wells Fargo. To circumvent that I do all my offers in cash and rarely do I get asked for POF. Once I do get an accepted offer I then use my local bank for the financing. Never once have I had anyone question this. No one!

Get a different realtor, or find a different house with less restrictions if this is an obstacle for you. Its a small hurdle to clear,


To wholesale and REO you have to set the contact up in a land trust and then sell the beneficial interest in the trust. This was you get around the no assignment clause in the contract.

There’s a few ways to wholesale REO’s.

You can;

  • Double close using your end-buyers financing or close on the house first then sell.
  • Contract the property under an LLC and sell the LLC
  • Buy with cash/financing first and then sell the deal a few days later.
  • Or as Jon Zorrer said, you can do the land trust way.

Over the years, if done all of the above, however we now mainly do clean deals.

Clean deals being simply doing a double closing utilizing the end-buyers financing
or purchasing the property and selling it immediately the same day. Nothing to
complicated and nothing that raises any flags. Everything is disclosed…

In regards to POF, can you get a relative to provide you with bank statements?
Can you get a private lender?

Another way is when you have an a-o on a REO and you find a buyer…you can add your buyer on to the contract and do a quit claim.

You close the deal with both of you on title, he does the financing (your along for the ride) and immediately after you close you quit claim your interest to the other buyer. If you go this route I would collect your fee up front unless you have done many deals with this particular buyer and you can trust him.


Look around for tampasteph or do a search for her posts. This is all she does and seems to be doing very well.

As far POF you might just have to be creative if you can’t qualify for a conventional loan or don’t want to use hard money. If you do a search for “john alexander” in google (don’t want to put any links on here). I believe, if I’m not mistaken, that with his program somehow they can provide you with a POF letter. Not sure if it’s legit as I am not a member…

Good luck!

Don’t you love how people answer before they fully read the post :flush.


Sometimes you can find great answers on this site…

… well you know the rest of the story.

I heard that using a Land Trust will kill your REO deal with the bank. Anyone else heard that?

There is no reason to use a land trust. Why muddy up such a simple transaction with many other options available besides land trusts.


I didn’t say it…

But, I have seen some of my students pic an internet based mortgage company and type up their own preapproval letter…

Rarely if ever do banks follow through on the verification…

I have sold 5 foreclosures in the past 2 weeks without any verification.

Or better yet…

Befriend an L.O and have them put one together for you.

I’ll spare you the numerous ways that you can wholesale REO’s because it didn’t appear that is what you were asking…

Good luck.