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Re: Bulk Reo
Posted by M Butler on May 31, 2008 at 1:12 AM
In Reply to: Re: Bulk Reo posted by CS on March 13, 2008 at 6:43 PM
Your comments about the whole industry/situation are similar to what I've experienced in the short time that I've been chasing around the money/buyer.
It's extremely frustrating. But here's what I can tell you. I'm here on the internet tonight because of the frustration I experienced today and I
want to find a "REAL BUYER" so bad...The people that I am associated with are genuine real hungry intelligent individuals.
The trust factors involved in this arena are the hurdles that have to be overcame. The intermediaries seeking the money or the tapes/inventory are putting
their reputations and word on the line without the real ability to affect a positive outcome. It's the nature of this animal. With that said, until my people
that have the tapes/inventory available for purchase DO NOT come through I can say without a doubt that they will come through. As of late Friday afternoon we
had access to 3 30B dollar tapes and 1 1B dollar tape. Contact me if you TRULY have the desire and ability to perform. mbutler@fundandlend.com
or 916-871-5573.
: : I have read that some banks sell bulk reos at 40c. on the dollar. Is that usually based on the original loan, or original sales price etc...how does that work? : GC: : It's supposed to be 40-60 cents on the dollar of the current FMV. 40 cents if you are talking about 100 m to 1 billion, low 50 cents for @ $25 million, high 50 cents for 5-10 million. : I have been loooking into bulk REOs for a few months. The story is that this buiness is evolving as we speak, because never before in history has the need for it existed on the scale that it is needed now. But there is a maze of deception to navigate through to find this supposedly available inventory at these discounts: Many brokers proport to have REO bulk inventory at 40% to 60% of FMV (that is, current, generally dropping Fair Market Value, or what it would sell for in 60-90 days on the mls)
: Generally, these are represented as fixed packages of a minimum of $5,000,000 value and often they are all or nothing--- no "cherry picking". Many investors have wasted a lot of time looking into these packages only to find that the discounts are not real, the BPOs are hopelessly out of date, or the inventory, when push comes to shove is not deliverable, not available. I have been told that what is going on in these time wasting scenarios is that brokers are fishing for qualified buyers, because they have no in with the banks that have bulk reo inventory to sell at discount sufficient for investor profit. To even talk to most such sellers, hard POF (proof of funds) is needed first. So the brokers are looking for the investors that can supply them with the POFs that they need to open doors to the good investor discount bulk deals. Without at least $5 million, whether your buyer rep has the contacts or is just fishing for a collection of POFs with which to get an in with real REO Seller sources, you are not in that game, unless you represent such a buyer, and he is willing to let you have a property or two out of his bulk package. If you are told that you can buy one or two of these properties at the bulk REO price direct from the source, I bet you will discover the supposed discount is not real, or is off of a too high value from the past, that no longer exists, and you and thousands of other people could have seen the same property and too high price before.
: I have ordered just one S Cal REO package from a source that seemd credible after a few discussions and refined questions over a few months. I expect the list of properties and prices next week, ordered by zip code, sq ft range, type (sfr), age and scope of repairs. When the list and the prices (BPOs are adjustable, with this source, if you have the up to date local evidence they lack)
: arrive next week, I will probably find out whether this source is for real, or not, within an hour or two of touring the inventory. : Logic would tell you that this business, to move accumulating inventory faster than the near retail end users or novice investors can exhaust their funds on the REOs in the MLS or the rigged auctions SHOULD exist, by offering the discounts sufficient to draw in serious sums of investor funds. But logic will also tell you that if these opportunities exist, they are not going to be publicly advertised like the bogus auctions are. The sellers want to talk to qualified buyers who can perform in bulk on the basis of ongoing, repeat business. They can't and won't talk to anyone else, is my understanding. That's from my seller rep source. I will know how good he is by next week. If his package is good, I'll take action. If the package is a disappointment, I won't have found out that much, in a few months of looking into it. CS
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