Hey all I wanted to see if there is anyone that has actually wholesale an reo property and was looking if you can explain the process that goes along with it. (being that you cant assign reo properties)
I used to work for the #1 REO broker here in San Diego and never saw anyone who came through assigning contracts on REOs. I honestly don’t know how people wholesale these types of deals…if they are even able too? If they are, I would really like to know how the process works. The bank really just wants a solid buyer and no fooling around with wannabees!
You can’t assign it but you can do a double closing, you have to out right buy the property yourself and then wholesale the property to an investor or a end buyer,
When it comes to REO properties you must be able to take title. That means you must be abale to close on the deals. There are really only two options for these types of deals.
1 Have the funding lined up and be able to take title.
2 Partner with someone that has the ability to close on these deals.
With the banks taking back a huge number of properties in the next year or two, this is a strategy you definitely want to take advantage of.
On REO properties, once you have written a contract in you or your business name, you can’t assign it over to another buyer before closing. You will have to close on it and then sell it to your buyer. The equity is typically not there anyway with the rehab work so wholesaling it will defintely a challenge. You may find one out there but not many.
You also need to think about chain of title. Once you take title and then turn it over the your buyer, unless they are paying cash, their lender will not like the idea that you just bought it and will definitely question the appraisal value of the home. Does that make sense?
alittle can you give a better example?
what does not make sense to you? I wrote a lot and am not sure what part you need more clarification on? Love to help. You can also email me directly with your questions. Sheila
I have done quite a few wholesale deals on reo’s and many times. depending on what your market is like there is a huge spread for equity. I recently closed on one that the bank paid $92,000 for a sheriffs sale and I paid $12,500. You are somewhat limited from an assignability standpoint unless you have prepped some pocket llc’s up front to sell. If you have cash buyers then you can always do the old back to back closing, I have done that a few times as well.