Flip This Wholesaler

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7/13/2009

I just wanted to write a quick post and let everyone know I'll be taking a brief blogcation (hehe) while we put the finishing touches on my shiny new blog.

Stay out of trouble while I'm away...

XOXO

Steph

7/10/09

I just wanted to write a quick post to reiterate the fact that my title company, (Peer Title), rocks.

Having to constantly deal with incompetence and laziness from listing agents, asset managers, and the bank's title companies, I can't tell you what a breath of fresh air it is to deal with a title company that doesn't suck.

I got an email from them this morning along with the preliminary HUD for the deal that I just got under contract (that isn't supposed to close until the 24th). The email said, "We are ready to close this deal whenever you are ready.."

They haven't even had the contract for 48 hours, and they are ready to close. God bless them.

I'm sure the bank's title company will do their very best to fuck everything up, but it's still nice to know that I have Peer on my side, ready to close the deal.

Amen to that.

If you're in the Tampa Bay area, and you need an investor-friendly title company, give Peer a call: 813.870.1614. I've been with them for almost 3 years, and have never once had them drop the ball. They ROCK.

And that's all I have to say about that.

10-4, over and out.

P.S.
Have a great weekend, Blogosphere!

P.P.S.
If you have any interest in securing private money to fund your real estate deals, set aside some time this weekend to watch Patrick and Trevor's free training videos. They are providing a TON of free, quality info, including a Q and A session that is almost 4 hours long, as well as the power point presentation that they use when approaching potential private lenders. Lots of good stuff in there...





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7/8/2009

So, I ended up finding another buyer for the property that I just got under contract. Actually, I found 3 buyers, but this guy was the first one to cough up a deposit and sign a contract. We met at my title company earlier today to get everything squared away.

This guy called me a few months ago when he saw one of my signs advertising a deal I had at the time. It took him a few days to go out and look at the property, and when he called to tell me he wanted it, it was already gone. I hadn't heard from him in awhile, and he just happened to call me on Monday to see if I had anything available. I told him about my current deal and he went out to look at it immediately (apparently, he learned his lesson about lolly-gagging) and called back within a half hour with an offer of 19k (I was asking 29k). I told him that was too low, and he said he would think about it and get back to me. Long story short, he ended up calling me back 3 times with higher offers (this is always a good sign), and yesterday we agreed on a price of 25k net (meaning he pays all closing costs).

It's 1k lower than the previous offer, which sucks, but I'll take it. I've got a lot of other stuff on my plate at the moment, and I just want to get this one squared away so I can focus on the other stuff... Also, this buyer is what I like to call a "Jackpot Buyer," so I'm willing to take a little less just to start building a relationship with him. He's got deeeeeep pockets, lots of properties, and best of all, he's not a douche bag. These are all qualities I look for in a buyer. My guess is that I will make a lot of money with this guy in the long run. Just a hunch.

Now I just have to get the bank and their title company to actually do their job. I'm a leetle bit scared that I haven't even received the executed docs back from the bank yet. Usually when it takes them several days to sign the contracts, it's a sign of what's to come. Also, this is the same freaking asset management company that was in charge of the last deal I was working on, that I ended up losing. This time, though, I have the asset manager's contact info (the listing agent accidentally sent it to me when she sent the bank's addendum), so I can personally harass the shit out of him if he doesn't get things signed in a timely fashion. Also, they are using a local title company, so if they suck (and chances are, they will), I can actually go into their office and harass them in person. Definitely a bonus.

That's all I've got for now.

Later Alligators.

P.S.
A big congratulations to Shae, who just closed on her first rehab, and also to Craig, who just closed on his first short sale! Both are shining examples of where PERSISTENCE and MASSIVE ACTION will get you!

7/6/09

So I had a dream last night that my buyer for the property that I just got under contract, backed out.

I called him first thing this morning to set up a time to meet and get everything signed, and he told me he does not want to move forward with the deal any longer.

Yay!

The house comes with an adjacent lot, and he was under the impression that the lot was buildable, and apparently it isn't. This is a deal breaker for him, unfortunately.

So now I have to find another buyer, which I'm fairly confident I can do, but I'm still pretty irritated about the situation. I was planning on setting aside this entire week to finish up my ebook, but now it looks like I'll also be marketing for another buyer.

Oh well.

I should know better by now than to count on a deal closing until I actually have the funds in my bank account. Even if you're sitting at the closing table, with all of the documents signed, and your buyer is sitting across from you with a cashier's check for the purchase, things can still go wrong.

Gotta love this business!

7/2/09

Sooooo....I got a deal under contract and sold yesterday! This is a different deal than the Hooker House I wrote about last time, which I am going to pass on.

I'm pretty sure this was the fastest I've ever sold a deal. And it was all done via text.

Here's how it went down....

2:32 pm- Phone call from listing agent of a property I offered on this past Monday. It went to highest and best, and I offered 21k (10k over list). She said there were 20 offers on the property, and they had it narrowed down to 3, one of which was mine. She told me if I verbally agreed to their new terms, she could get my offer pushed through. They wanted 10% in escrow instead of the 1k I offered, and everything else was the same. I agreed to the new terms.

Oh, and she also wanted to verify that I was giving her both sides of the commission, including the 3k bonus to the selling agent. I'm sure this had nothing to do with me getting the offer accepted.

5:07 pm- Email from listing agent telling me they are taking my offer, and that I need to sign bank's addendum and return it within 48 hours, along with earnest deposit.

5:50 pm- After going to look at the house one more time, sent the following text message to my favorite buyer: "Hey Favorite Buyer, I just got a house you are going to like. 123 Main Street. 1200 sf frame, carport, fireplace, comes with extra lot. Nice street. Lock box 8590. Asking 29k."

6:35 pm- Text from Favorite Buyer: "20k."

6:36pm- Text to Favorite Buyer: "27k."

6:36 pm- Text from FB: "24k."

6:38 pm- Text to FB: "26k. Work with me here."

6:39 pm- Text from FB: "OK. 26k."

6:39 pm- Text to FB: "Cool. It's scheduled to close on the 24th. That OK?"

6:40 pm- Text from FB: "OK."

6:42 pm- Text to FB: "If you're around this weekend, we can meet to sign everything. Just let me know when."

6:46 pm- Text from FB: "OK, no problem."

And there you have it.

I probably could have found a buyer for more than 26k, but I'm always one to take the quick nickel, especially if it is from one of my solid buyers. This will be the 4th house I've sold to this guy this year, and the 6th since last summer.

Just to give you a little insight as to how important it is to make clean offers when you're bidding on a hot REO property..... the agent told me there was an offer of 30k on the table, but they wanted a 7 day inspection period. My offer was 9k less, but had zero contingencies.

It also helps to bribe the agent by giving them both sides of the commission. Especially when there is a 3k bonus being offered..

OK, Gotta run..

Have a safe and fun-filled 4th of July!



P.S.
I just added Patrick and Trevor's Private Money Blueprint to my list of recommended courses. If you have time this weekend, check out the free videos- there's several hours of quality content for your viewing pleasure...

7/1/2009

Well, I got an offer accepted yesterday.

I actually made the offer on the 15th of June, and never heard back, so I just figured they were rejecting it. The property is listed for 30k, and my offer was 17k. I made the offer without seeing the property in person, as I am getting increasingly lazy when it comes to actually going and looking at houses. I've done a lot of deals in this particular area (the hood), so I feel fairly comfortable making offers site unseen, especially when there are plenty of pictures of the house on the mls..

Anyway, so the bank came back last Friday (10 days later) with a counter of 25k, and at that point I decided to go look at the house. It's a 3/1 on a corner lot, and unfortunately, the neighborhood liquor store/prostitute hangout is right across the street. Not good. Also, the house has a funky layout, which is also not good. Two strikes on a piece of crap property in the hood is not good. (That was an accidental rhyme, btw)...

So, I told the listing agent that I wasn't budging on my price, and I figured that was the last I would hear from her. She ended up calling late yesterday afternoon to tell me they decided to take my initial offer of 17k.

Go figure.

I'm meeting Murphy out at the house as soon as I'm done writing this post to get his opinion on it. I told the listing agent I wasn't sure I still wanted to move forward with the deal, being that I made the offer 2 weeks ago, and now I have other properties to consider. This is kind of true, but mostly not.

I normally don't like jerking people around, but when it takes the bank 10 days to respond to an offer, I don't really feel too bad making them wait around a day or so for me to make a decision. Actually, I kind of enjoy it.

And that's all she wrote for today. I'm off to the hood....

P.S.
I haven't forgotten about the Power of Less Challenge for July. I'll write a post about that mañana.


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6/29/09

So, I got a call over the weekend from a wholesaler in Tampa who is just getting started wholesaling REOs. He saw one of the ten million signs I have plastered all over the place, and called me to see if I could help him out. Basically, he just went out and started making offers on REOs without really knowing what he's doing- kind of a "ready, fire, aim" approach. Well, he ended up getting a property under contract at a REALLY GREAT price, and after finding out that he couldn't assign the contract, he was ready to just back out of the deal because he didn't have the funds to close on it himself. So, he was calling me to tell me about the deal, and to see if he could just get a bird dog fee from me if I ended up contracting it and selling it.

My first question to him was- "Why don't you just do a simultaneous closing?" And his answer was- "There are no title companies in Tampa who will do them. I was told they are illegal."

He told me he called every title company he could find, and that not a single one of them would do a simultaneous closing.

As you guys know, I do all of my closings using a simultaneous close, and I know of four title companies in Tampa who will do them. Actually, make that five. I just thought of another one.

I know I've written about this before, but I just wanted to once again emphasize that the best way to find an investor friendly title company in your area is to ask the active wholesalers who they are using. If you whip out the Yellow Pages and start going down the list (that's what he did), you are most likely setting yourself up for a healthy dose of rejection!

Now, I know you are probably thinking to yourself, "That makes sense, Steph, but how in the hell do I find wholesalers in my area? I'm a newbie and I don't have any connections yet!"

My first suggestion would be to head on over to RealEstateInvestor.com, sign up for an account (it's free), and start NETWORKING! You can even do a search for wholesalers in your city. I just did a search for wholesalers in Tampa, and this is what I came up with. Do you think that one of those 37 people might be able to help you out if you sent them a message asking for a title company referral? It doesn't get much easier than that!

If you don't find what you are looking for on REI.com, you can also search Facebook for real estate groups in your area. I just did a search for "Tampa Real Estate" on Facebook, and got 500 different results...

You get the picture, I think...

OK, gotta run. Literally. :)

Happy Monday, Blogosphere!

P.S.
You can also search those sites for BUYERS!

6/25/09

Even though I knew this was going to happen, I'm still irritated as all get out.....The deal that I lost a few weeks back (the one that dragged on for 2.5 months because the asset manager is a moron), ended up coming back on the market for LESS than what I was trying to renegotiate it for. Someone else now has it under contract. Probably DB.

You would think that the worthless agent would have called and given me a heads up, especially since I was giving her both sides of the commission and was ready to close yesterday. I guess that would make too much sense, though.

Oh, well. Win some, lose some..

In other news, I'm currently working a deal with Murphy that we should be getting locked up today. This is a property that I offered on right when it hit the market and they rejected it. So, I waited 2 weeks and had Murphy put an offer in on it. I have an investor who really likes this area, and I know he'll like this house, so I want it. We're only a few grand apart with the bank, and I think we'll be able to get it wrapped up today.

That's about it for now. A bunch of new properties hit the market over the last few days, so I'm off to check them out!

Have a great day, Blogosphere!

P.S.
A big, virtual, pat on the back is in order for one of my readers, Alex. He enrolled in Lee's REO Rock Star course last month and just got his first property under contract! Nice job, buddy!

Fortune favors the bold, guys, so get on out there and MAKE SOME OFFERS!

6/22/2009

So, I spent the weekend working on an ebook that I intend to have ready shortly after my new blog is up and running (which should be the middle of next month). Initially, it was going to focus on building a buyers list for wholesale deals, but once I started writing it, I found that there was a lot more information that I wanted to put in the book.

I probably get 100 emails every week from readers of this blog, as well as readers of the REI forums that I participate on (Flippinghomes.com, BiggerPockets.com, REIClub.com). Most of the emails are questions about the process/mechanics of flipping REO properties, building a buyers lists, how to get started, etc. On average, I probably spend 2 hours/day answering emails, and after a year or so of doing this, I feel like I have a pretty good grasp of the questions most beginning investors have when it comes to getting started wholesaling REOs.

Over the weekend, I went through all of my old emails and private messages from the forums, and came up with a ginormous list of questions that I have been asked over the last few years. I plan to address all of these questions in the the ebook (and then some), but I also wanted to get some feedback from you guys to see if there's anything I missed.

What are the questions that you want to have answered? What are you most confused about when it comes to the process of wholesaling REOs? If you've already bought a course that teaches you how to flip REOs, was there something missing that you wish was included in the course?

I'm going to post the list of questions that I came up with (it's kind of long). If there's something I missed, please let me know. I would appreciate your feedback..

(1) What is an REO?

(2) Where do you find REOs?

(3) Do I need access to the mls if I want to wholesale REOs?

(4) How can I get access to the mls?

(5) How do you know which properties are REOs?

(6) How can I search for REOs once I get access to the mls?

(7) How do I find a realtor to submit offers for me?

(8) Can I use my own contract when making my offers?

(9) Which contingencies should I use when making offers?

(10) It says in the listing that I need a proof of funds letter to submit with my offers, is this true?

(11) Where can I get a proof of funds letter?

(12) Can I use a letter from a transactional funding source to make a cash offer?

(13) How do I choose which properties to offer on?

(14) Do I need an earnest money deposit to submit with my offers?

(15) I read on your blog that you got started when you were broke. How did you get around the earnest money deposit?

(16) I plan on making multiple offers on REOs, do I have to supply an earnest deposit with every offer?

(17) How soon is the earnest money check deposited once my offer is accepted?

(18) What if I can’t find a buyer? Do I get my deposit back?

(19) How do I decide how much to offer on an REO?

(20) What is the best way to learn what a deal is in my market?

(21) I made an offer and haven’t heard anything back. How long does it take for the bank to respond?

(22) The bank is asking for highest and best, what does that mean? How high should I go?

(23) The bank rejected my offer. Should I make another offer on it down the road? If so, how long should I wait?

(24) I plan on making a lot of offers on REOs, what’s the best way to keep track of them?

(25) My offer just got accepted! Now what?

(26) What’s up with this 40 page addenda? Do I have to sign it?

(27) When should I start marketing for a buyer?

(28) What are the top ten ways to build your buyers list?

(29) How do you prescreen your buyers to know that they are for real?

(30) Should I get a deposit from my buyer? If so, how much?

(31) My buyers are asking me how long I’ve owned the house. What should I tell them?

(32) What if my buyer tries to go around me and cut me out of the deal?

(33) What if my buyer finds out the property is listed on the mls for less than what I am selling it for?

(34) How do I get my buyer inside the property to view it?

(35) Can I assign my contract to my buyer?

(36) If I can’t assign the property, how do I sell it to my end buyer?

(37) My realtor told me simultaneous closes are illegal, is this true?

(38) The addenda says I have to use their title company to do the title work, is this true?

(39) I see that you are closing your REO deals at your title company. How are you able to do this?

(40) What is the best way to find a title company who will do a simultaneous close?

(41) What if I can’t find a title company who will do a simultaneous close?

(42) What is transactional funding?

(43) What are the fees involved?

(44) Will they fund the deal if I do not have a buyer?

(45) Should I tell the listing agent/bank’s title company that I am flipping the property?

(46) What happens if my buyer backs out of the deal the day of closing?

(47) I plan on making multiple offers on REOs. What happens if they all get accepted?

(48) I read on your blog that you do joint venture deals with other wholesalers. How do you find wholesalers to work with?

(49) How much do you get paid on a JV deal?

(50) What contracts do you use?

(51) How do you ensure that you are going to get paid?

(52) How do you prevent other wholesalers from stealing your buyers when you do JV deals?

(53) Do you make your offers in your personal name?

(54) Why do investors need me when they can just go on the mls and get the deals themselves?

(55) My brother told me that everything on the mls is picked over. True?

(56) I want to be a successful REO wholesaler. What do you think is the most important step in making that a reality?

(57) What formula should I be using to make my offers? What formula do you use? How much should I offer?

(58) How can I structure my offers so they are more likely to be accepted by the bank? What kind of offers are they looking for?

(59) How do I pick which properties to offer on? What do you look for when you are picking properties to offer on?

(60) What is the average DOM of the houses you put under contract?

(61) If you were starting over with no cash and no credit, what steps would you take to set up your REO wholesaling business?

(62) Do I have a better chance at getting my offers accepted if I make the offer directly through the listing agent?

(63) What is the average discount off of list price that you get?

(64) Should I ever offer full list price?

(65) What is your average profit on your REO wholesale deals?

(66) How many offers does it take for you to get a deal?

(67) Do you ever make blind offers? If so, how do you decide what to offer?

(68) I just listened to a webinar that suggested I make hundreds of blind offers at once just to see if anything sticks. Do you think this is a good idea?

(69) I’m confused about the steps involved in flipping an REO from start to finish. Can you walk me through a deal?

(70) Can you give me some numbers of some of the deals you’ve done?

(71) How long does a deal usually take from start to finish?

(72) I’ve heard that the bank’s title companies suck. Is this true?

(73) How can I get the bank’s title company to hurry the hell up?

(74) I plan on putting properties under contract and using a weasel clause, and then backing out if I can’t find a buyer. Do you think this is a solid plan?

(75) The listing agent is telling me the bank wants 10% in earnest money. I don’t have it. What should I do?

(76) I’ve made over 500 offers and I haven’t gotten one accepted. What am I doing wrong?

(77) I heard that I can’t flip a Fannie Mae property for more than a percentage of the purchase price. Is this true?

(78) Can I wholesale an REO to someone getting a conventional loan? Why not?

(79) An agent is refusing to submit my offer because it is too low. Don’t they legally have to submit the offer?

(80) I’m trying to submit an offer on a Countrywide property, and they are saying I need to be prequalified with CW even though I have a prequal from my hard money lender. What can I do?

(81) I read on your blog that you use bandit signs to sell your deals and find buyers. What do you write on them?

(82) Where do you get your signs, and how much do they cost?

(83) How many signs do you usually put out at once? Where do you put them? Don't you get fined for putting them out?

(84) I read that you find buyers by calling "for rent" signs. Is there a script you use when you call? What do you say?

(85) I see that you live in Tampa, FL. What the hell is up with all of the real estate gurus there? Is there something in the water? Good grief.

(86) Does Watson Title really suck that badly?

(87) I read on Facebook that you have a Helper Monkey. Where can I get one?

********************************************************************************

OK, so that's what I have so far.

What do you think? What am I leaving out?

What is it that's holding you back from wholesaling REOs?

Any input is appreciated....

Speak now or forever hold your peace!

6/19/09

I recently stumbled upon an article that I wrote last year for Trevor over at The REIBrain, and I thought I would share it with you guys.

It's basically a synopsis of my first year as a wholesaler (which was an absolute NIGHTMARE).

I know there are a lot of you out there who are dealing with frustrations in trying to get your REI business off the ground, and I just wanted to encourage everyone to keep at it. I dealt with the same frustrations and struggles, and it took a LONG time for things to finally click.

Make a commitment to yourself to keep pushing forward until you reach your desired goal. I know it isn't easy to keep going sometimes, but I promise you that your efforts will be rewarded if you persist.

Enjoy the article, and have a great weekend, Blogosphere!

6/17/09

Well, I wasn't able to save the deal, and it is now officially dead. I'm pretty sure that DB was just waiting for my time to run out, and I bet he'll have an offer in on it today. With a little luck, maybe he'll buy the property and the rest of the roof will cave in on his head. Just kidding. Kind of.

I got a counter back yesterday afternoon from one of the houses I offered on yesterday morning. This is shocking, as it usually takes them five years (give or take a year), to get a response from the bank. The bank countered @ 13k and I am trying to get it @ 10k. The house is in the hood, but it's not in horrible shape, and I have a few guys who like this area, so I'm going to send both of them by today to see if they'll bite. One of these guys bought a house from me on the same street last year for 27k. It needed a lot less work, though, and had 1 extra bedroom. We'll see.

I've been trying to make at least 3 offers/day every day, but there really isn't that much to choose from right now, so I'm continuing to work deals with a few of my wholesaler friends. I usually get at least one call/day from other wholesalers asking if I want to JV on deals with them. This is a good thing for me, especially when there isn't much available on the mls...

Anyhoodle, that's about all I've got for now. I've been a busy little bee working on stuff for the new blog (which should be ready to go by mid-July)...

Gotta run- I'm off to the gym. No excuses for me today..



P.S.
I found this video on the Zen Habits blog, which is my new favorite blog. Lots and lots of good stuff over there..

6/15/09

Well, it looks like I'm not going to be able to pull this deal off after all. I've got a few guys that are on the fence about it, but I don't think I'm going to be able to get them to commit by the end of the day today.

I ended up putting out 60 signs over the weekend (the goal was 100, but I didn't quite make it). My phone was ringing off the hook yesterday, although most of the calls came from tire kickers and/or people who couldn't speak English. That's the way it goes sometimes..

I need to get a few more deals in the pipeline, so this week I'll be making a massive amount of offers, and putting a massive amount of signs out looking for more buyers...

I hope all of you guys are doing well with the goals that you set for yourselves this month- today is the halfway point, so I thought I would update you with my progress.. I committed to getting up at 6 am 5 days/week (M-F), and getting my cardio out of the way first thing... So far, I am 11 for 11! I haven't missed a day yet, and I have to tell you, it feels FANTASTIC! I'd like to start implementing a few more habits into my daily routine, but Leo Babauta is adamant about only working on developing one new habit every 30 days. I think I will take his word for it, being that he is a Zen Master and all..

Well, gotta run- the mls is calling me....

Happy Monday, Blogosphere!

P.S.
Did anybody else get their Facebook vanity url over the weekend? I forgot about it until Saturday afternoon, but still managed to get my name! Facebook.com/StephaniDavis. :)

6/12/09

So, as you may have guessed from my last post, Mr Price didn't want to go along with the proposed price reduction. He sent over extension #4, which would have the property closing on the 19th (next Friday). I haven't signed it yet, and do not plan to, unless I can find a buyer this weekend. I made up a story about having to get my GC back in the house today to look at the repairs one more time before I sign the extension. If they get impatient and try to reach me today to see what the status is, I'll conveniently not answer my phone and/or emails, and drag this thing out until Monday. After almost 2 months of waiting on this jerk-off to sign a couple of documents, I will thoroughly enjoy giving him a taste of his own medicine.

I put out 30 signs for the property yesterday, and strangely, have not received 1 single call. I've never had that happen before. I'm heading to the sign shop today to pick up 100 more, and the goal is to put all 100 out this weekend. If that doesn't get my phone ringing, nothing will. I need some new buyers anyway, so it all works out...

I could be mistaken, but the last time I checked the mls, there seemed to be quite a few new REOs listed, and I'm wondering if that fabled 3rd wave of foreclosures is on it's way? I certainly hope so. Everybody better clear the way once it gets here, because I am GOING TO TOWN!

Well, I'm off to the pool- I've got a swim date with Michael Phelps....

Have a great weekend, Blogosphere!

6/10/2009

Dear Joe,



From the bottom of my heart.

Sincerely,
Stephani Davis

6/9/2009

So, I received the following email yesterday from the bank's title company regarding the deal that has been extended by the bank 3 times and that is supposed to close tomorrow....

"I have received the deed in today from the seller and that completes all the items I needed in order to move this file to the closing department. We will need an extension signed to on/or before 6/19. The seller requires at least 4 days to approve the hud so this will not be able to close on 6/10.

Robin, please discuss with your buyer as she called and wanted a status.

Claire will be the closer on this and she can be reached at xxxxx@zzzz.com and ext 2153. Please communicate and coordinate the
closing with Claire directly.

Thanks,
Lois"

So, we are now extending for a FOURTH time. What a joke. I find it especially hilarious that the bank needs four effing days to review a HUD. Also, if they need four days, and yesterday was the 8th, why do they need to drag it out until next Friday the 19th? Inquiring minds want to know. It's like they want to hang on to this piece of crap house as long as they possibly can. I should have tried to wholesale it back to them instead of DB.

As I mentioned before, because of the 2 weeks of rain we got in Tampa recently, this house sustained quite a bit more damage than was initially present when I put it under contract. I went out yesterday to take pictures, and also had a contractor write me up an estimate to send along with my request to have the price reduced by $2750 (I plan on splitting the savings with DB so he doesn't walk from the deal).

Here's a peek at what the ceiling looks like after 2 weeks of rain....




More mold- yay!


Second hole in ceiling...


Now, you would think the (lazy, incompetent) asset manager would take a look at these pictures and say to himself: "Self, I guess I shouldn't have taken FOUR WEEKS to get the deed package signed! The house looks like an even bigger piece of crap than it did initially, so I guess I better drop the price a few grand and get this thing off the books."

That's what I would do, anyway.

Then again, I'm not lazy and incompetent, so what do I know?

I'll keep you posted....

Way to go, R-Fed!

6/5/2009

Of all the questions I get from readers about the mechanics of structuring and completing an REO wholesale deal, the one I get asked most frequently is how to handle the closings. I thought I would post a few of the most frequently asked questions, in hopes that it would clarify the process for you.....

Here we go...

* Can you assign an REO?

99% of the time- NO. Most banks will have a clause in their addenda that prohibits you from assigning your contract. Every bank contract that I have ever signed has been non-assignable.

* My realtor told me that simultaneous closings are illegal, is this true?

I have been told that simultaneous closings (back to back closings where the funds from the second transaction are also used to fund the first transaction) are illegal, too, but I have yet to have anyone show me the law or statute that supports this as being true. I have consulted with two real estate attorneys in Tampa, and both have told me the same thing- no, simultaneous closings are NOT illegal. Many title companies will not perform simultaneous closings, as their underwriters will not insure the transactions, but this does not make them illegal.

It may be different in other locales, but in Tampa, simultaneous closings are alive and kicking.

If you have questions or concerns about the legalities of simultaneous closings, check with a real estate attorney in your area. It's best not to take legal advice from realtors, mortgage brokers, neighbors, Aunts, Uncles, etc (or me, for that matter). Always do your own due diligence.


*How do I find an investor friendly title company in my area who will close an REO wholesale deal?

The best way to find a good title company is to ask for a referral from someone who is actively doing REO wholesale deals in your market. That is how I found mine- I sought out the wholesalers who were doing the most volume and I asked them who they were using. Peer Title was the recommendation that I was given, and I have been with them ever since.

If you grab the Yellow Pages and start cold calling random title companies and asking them if they perform simultaneous closings- be prepared for a mountain of REJECTION. Most title companies do not do them, and many do not even know what they are. Save yourself the headache, and just ask someone who is active in your market for a referral.


* I thought that the banks make you use their title company on REO deals- how are you getting around this?

OK, here is where there seems to be A LOT of confusion..

Yes, it is true that most of the banks force you to use their title companies (and most of their title companies SUCK, btw). There is no way around this that I am aware of.

The bank's title company is in charge of doing all of the title work and preparing all of the closing documents. Once all of this is ready, and the deal is ready to close, I let the bank's title company (or the listing agent if I am not in contact with the title company) know that I will be signing all of the documents at my attorney's office/title company. I then request for them to email the closing documents and wiring instructions to my title company. I tell them that my title company will do a "courtesy closing" for them, which means that they will get all of the closing documents signed and collect the funds for the purchase. Once everything is signed and funded, my title company FedExes the documents back to the bank's title company and wires them the funds from the sale.

I do not ever try and explain to the agent or the bank's title company that I am flipping the house on the same day via simultaneous close. This will only cause confusion. All they care about is that the deal gets closed on time, and I make sure that it does.

I have closed all but 3 of my deals in this manner and have never run into a problem doing it this way.

The key here is to have an investor friendly title company on your side who is familiar with this kind of transaction. You need to line this up BEFORE you put something under contract. If you wait until after you have a deal signed to try and coordinate all of this, you are asking for trouble. Have your exit strategy lined up FIRST!

*I've searched and searched, and I can not find a title company in my area who will perform a simultaneous closing. Now what?

If you are unsuccessful in finding a title company who will do a simultaneous closing, you can do a double closing instead (where you will have to bring cash to the table). You can accomplish this by using transactional funding aka "flash cash" or "flash funding" to fund the transaction between you and the bank. There will be fees associated with borrowing the money, so make sure to factor that into your numbers when you are structuring your offers.

If you are looking for a transactional funding source for your REO or short sale deals, I recommend CashForMyClosing.com. This company is owned and operated by one of the members of my mastermind group, Brian Meidam. There is a FAQ section on his site that should answer any questions that you have about the process.

CashForMyClosing.com will also provide you with a free proof of funds letter to submit with your REO or short sale offers. All you have to do is fill out the form and a letter will be emailed to you!

I hope this answers some of your questions about the mechanics of closing an REO wholesale deal. If you have further questions, or would like me to clarify anything in this post, feel free to ask.

Have a great weekend!

6/3/2009

So far so good with my Power of Less Challenge. It's day 3, and I've been up at 6am all 3 days, and in the pool swimming laps by 6:30. I wasn't aware of it until yesterday, but apparently Michael Phelps lives in my building, and trains in the pool on the 8th floor. OK, not really, but there's a guy who looks just like him who was at the pool the same time as I was yesterday, and he was swimming up a storm and making me feel like a total jackass. I may as well have been dog paddling... he was swimming 2.5 laps to every one that I swam. It was quite embarrassing, but I ended up getting a phenomenal workout because I was trying extra hard to keep up with him. I can barely move my arms today, which is a good thing...

On the real estate front, things are going well. For the most part. The short sale that I got under contract a few weeks ago is scheduled to close next Friday. The deal that has now been extended 3 times looks like it is going to crash and burn. The new extension goes until the 10th (next Wednesday), but I don't have any confidence in the bank signing the closing documents. DB is the buyer on this one, and he said that if it isn't ready to go by the 10th, he is going to pass, and I can't say I blame him. It's been over six weeks now since we signed the initial contract. Also, there is a leak in the roof of this property, and after all of the rain we got these past few weeks, there is quite a bit more damage (and mold) than there was a month ago. The bank actually sent someone out to cover the roof with a tarp last week (after I called and complained), but the damage has already been done. I tried to get them to knock off a few grand to compensate, but, being the ignorant assholes that they are, they wouldn't budge.

I sent an email off yesterday to both the listing agent and the title company letting them know that I am going to pass on this deal if it doesn't get closed on or before the 10th. Both of them forwarded it to the bank's asset manager, who, apparently doesn't give a crap. If they aren't able to get it done by the 10th, I'm going to try one more time to get them to knock several grand off the purchase price. If they say no, I'm going to have to walk. Nothing like having a payday flushed down the toilet because of someone else's incompetence. Yay!

Other than that, I've been busy making offers and looking for buyers. Gotta keep the funnel full..

Gotta run- later alligators!

6/1/2009

So, I thought I would switch up Accountability Monday a little bit this week.

After listening to the Harmonic Wealth cds on my trip to Destin, I decided that I need to make some serious changes to my lifestyle. I need to work on ridding myself of my bad habits (of which I have many), and replacing them with habits that are going to get me to where I want to be.

Over the weekend, I was poking around on the Internet, and stumbled upon a post by Tim Ferriss that talks about how to successfully create new habits. If you have a few minutes to spare, head on over there and check it out- I think you will like it. Go ahead and read it now....I'll wait...

I really like the idea of only picking one habit to implement at a time, and then focusing on it for one month, as opposed to trying to revamp your entire life all in one fell swoop. This is what I have done in the past, and I know from experience that it does not work (think New Year's resolutions). I feel confident that by picking one habit to work on at a time, that I will be much more effective than by trying to turn myself into Wonder Woman overnight.

After reading Tim's post, I decided that today would be the perfect day to start a Power of Less Challenge.... it's a brand new week, and a brand new month.... perfect timing! It is suggested in Leo Babauta's "The Power of Less" (which I'm going to pick up at Borders today), that you tell as many people as possible about the new habit you intend to create- by posting it on an online forum, or sending out an email blast....

So...for the month of June, the goal/habit that I am going to focus on, is getting up @ 6am and doing my cardio (either running, swimming laps, or rollerblading). I am very inconsistent with my exercise routine, and I have been struggling with this all year. I feel fantastic when I get up early and hit the gym first thing, but I always seem to get sidetracked (usually by emails, Facebook, phone calls, etc), and next thing I know it's 5pm and I don't have the energy to do it.

I chose this goal/habit last night, and I was up at 6:15 this morning and in the pool by 6:30. My intention is to do this 5 days/week (M-F), and then take the other 2 days off.

I intend to follow through with this, and will be posting a new goal/habit at the beginning of each month, as well as reporting on my progress throughout the month.

I hope that you guys will join me in doing this- I think it is something that we can all benefit from. It is key to let as many people know of your intentions as possible- it will help keep you accountable and give you motivation to succeed.

Don't wait until tomorrow, or next week, or next year, to start. Start today. Even if it is a small goal- start today.

Let's hear it guys- what is your challenge for June?