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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Bulk Sale or Multiple Purchase? Posted by Tom on March 14, 2008 at 12:29 AM In Reply to: Re: Bulk Reo posted by CS on March 13, 2008 at 6:43 PM I don't doubt for a nanosecond what you say about realtors. I could tell you war stories about realtors, but I'm not interested in assuming a new identity in a witness protection program. Although brokers might style it as a bulk sale for marketing purposes, it sounds like more of a multiple sale with a broker's commission to be absorbed by the lender (or indirectly the investor). The list that you anticipate sounds like a list of their REO sorted by category. Nothing more. This is not how you work bulk sales. A broker or investor can define a bulk sale just about anyway they want. It's beyond comprehensive why a lender would use a broker on a true bulk sale. From what you've stated it sounds like these brokers have minimal, if any, rapport established with these lenders (first red flag). Mostly a lot of false bravado. Everybody talks a good game investors included, so you take everything with a grain or two of salt until you see the color of their money. When you're selling anything in bulk you never ever allow people to cherry pick. The homework assignment is to write that sentence a 100 times. About the closest any lender could selectively package property for sale in bitable chunks for investors is by zip, 1-4 fam, etc. It's totally different selling loans on the secondary market, but there are less obstacles selling loans. Brokers and investors are hallucinating. The lenders should go direct to the public via auction. Cut out the middleman to the largest extent possible. If a lender were considering a bulk REO sale they'd go direct and cut out brokers altogether. You're asking for problems to incorporate brokers as middlemen and adding an unnecessary cost. Lenders can average 85%AV doing honest auctions. I know, I've done it. Okay maybe some properties are grossly trashed out or wrong side of tracks, but you could still average far far north of the percentages you mentioned. As far as the percentages bandied about it's all hearsay. Nobody but the lender knows what their AV, DOM, admin & carrying costs are. Continue the auction route to purge excess inventory and junk that nobody will buy. Historically lenders have done very well using MLS & auctions. Why run a new play when the defense hasn't stopped the other plays that you've run all day? Administratively there are too many problems and potential problems in bulk sales to probably overcome. Auctions pose many administrative obstacles, but at least when the auction is concluded you know X percent will sell, X percent will drop out, and can reasonably estimate your cash flow post-auction. In the scenario you've described the lender doesn't even know if the investor will get out of the batter's box let alone to first base. Like many things in life it sounds good in theory, until you have to figure out how to made it work in an imperfect world where money hungry lawyers abound. I wish RE were as simple as most people think, but then anybody could make money at it. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : I don't doubt for a nanosecond what you say about realtors. I could tell you war stories about realtors, but I'm not interested in assuming a new identity in a witness protection program. Although brokers might style it as a bulk sale for marketing purposes, it sounds like more of a multiple sale with a broker's commission to be absorbed by the lender (or indirectly the investor). The list that you anticipate sounds like a list of their REO sorted by category. Nothing more. This is not how you work bulk sales. A broker or investor can define a bulk sale just about anyway they want. It's beyond comprehensive why a lender would use a broker on a true bulk sale. From what you've stated it sounds like these brokers have minimal, if any, rapport established with these lenders (first red flag). Mostly a lot of false bravado. : Everybody talks a good game investors included, so you take everything with a grain or two of salt until you see the color of their money. When you're selling anything in bulk you never ever allow people to cherry pick. The homework assignment is to write that sentence a 100 times. About the closest any lender could selectively package property for sale in bitable chunks for investors is by zip, 1-4 fam, etc. It's totally different selling loans on the secondary market, but there are less obstacles selling loans. : Brokers and investors are hallucinating. The lenders should go direct to the public via auction. Cut out the middleman to the largest extent possible. If a lender were considering a bulk REO sale they'd go direct and cut out brokers altogether. You're asking for problems to incorporate brokers as middlemen and adding an unnecessary cost. Lenders can average 85%AV doing honest auctions. I know, I've done it. Okay maybe some properties are grossly trashed out or wrong side of tracks, but you could still average far far north of the percentages you mentioned. As far as the percentages bandied about it's all hearsay. Nobody but the lender knows what their AV, DOM, admin & carrying costs are. : Continue the auction route to purge excess inventory and junk that nobody will buy. Historically lenders have done very well using MLS & auctions. Why run a new play when the defense hasn't stopped the other plays that you've run all day? Administratively there are too many problems and potential problems in bulk sales to probably overcome. Auctions pose many administrative obstacles, but at least when the auction is concluded you know X percent will sell, X percent will drop out, and can reasonably estimate your cash flow post-auction. In the scenario you've described the lender doesn't even know if the investor will get out of the batter's box let alone to first base. Like many things in life it sounds good in theory, until you have to figure out how to made it work in an imperfect world where money hungry lawyers abound. I wish RE were as simple as most people think, but then anybody could make money at it. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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