Hello All,
With the banks having so much inventory do you think that they would be willing to do Lease Options? Or will they just want to get these assets off there books?
Yes, the banks sure do have lots of inventory. Probable to much and if there was an easy way to manage this, they probable would.
However the problem is the Federal Banking Laws, you see a bank is mandated to operate as a bank, not a property management company.
Federal law prohibits banks from being in the property managagement business.
So should I try to get an Private buyer and then do the LO?
If your going to try to get a private buyer, why not just make them a credit partner or look for a private lender. I guess I am just looking at it as someone who looks to rehab and flip.
Currently, banks need to iimprove their balance sheets. They want to increase liquidity and raise cash which is an asset. And, decrease liabilities which are loans. Anything underperforming they want to get rid of.
As Gold River has already said, banks are in the lending business, not property management. They want and need to reduce their inventory with sales, cash sales and fast closings. Once you have taken title, then you are free to sell via lease option.
If you’re looking at doing lease/options, go after motivated sellers directly.
You can negotiate anything with a motivated seller who isn’t listed with
an agent or have someone representing them.
Lease options are one of my favorite ways of investing but you need to do them with motivated sellers. I find the best deals are ones that need some work as you usually can trade work for the option fee. Forget banks they want to sell outright and by law have to.
donrock
Gold River,
You state that it is illegal for them to be property managers, but to what extent? I have seen apartments that have become REOs and the banks do not kick out the tenants. However, I have yet to see an REO SFH, where the bank does not kick the tenant out.
Where can I read about the Federal Banking Statutes that regulate REOs?
An apartment building over 5 units is a commercial loan. It is under an entirely different set of laws that govern those kinds of properties.
A single family home, a duplex, triplex and a four plex all fall under residential one to four units. These loans and lenders are governed differently because of regulations imposed by HUD, FHA, Fannie & Fredie, and the VA.
There is reason a single family home with a rentor / leasor is normally evicted, it is the definition of the type of loan.