I wanted to update this forum and update all the readers as to all the wonderful things I’ve read about bulk REO Sales.

I was somewhat incorrect in stating that no bulk REO sales take place, as from my research since the last post, I’ve found about 10-15 deals that have closed. All have been smaller packages in the 1m to 25m range, with one being a package with a purchase of dozens of REO properties in metro Detroit for $62k (With a market value in the 2 million range, talk about a deal!).

Anyways, In addition to finding out all this WONDERFUL information I’ve also been contacted by plenty of people that didn’t know what they were doing, and have absolutely no hopes of ever accomplishing bulk REO deals.

So, Having said that, I do have TWO Bulk REO seller brokers that do have legitimate deals, and can close them/have closed them.

Heck, I’m involved in a package deal right now, and everything is good.

So…..If you would like to be set up with one of the fabulous bulk REO Sources , I’ll need this information from you :

• Are you principals or agents in this space?
• What is your capital structure? Hedge fund, LLC, Subsidiary?
• Will you be using a warehouse line or straight equity in your expected REO transactions?

• What equity capital is “in position” today? What warehouse/financing is “lined up”
today?

• Have you done a transaction before? If YES, what law firm did you use?

• How many people in your company?

• What was your company doing last year?

• When and how did you raise your equity funds? Reg D offering 504, 506?

• How long have you been in this type of business?

• What title firm branch did you use? Name?

• Who is your accounting firm?

• What state are you incorporated in

• Who is the person in your organization with the most experience in this space?
What’s their experience?

• What is your stated investment strategy?

• Does the management of the firm also control the investment decisions?

• Elaborate on your exit strategies?

• Is there anything that we should know about your firm?

If you can answer those questions, I can then put you in touch with a legitimate seller.

Don’t want me in the daisy chain? I do have flat fee for their contact information.

I wanted to post this up, here recently I’ve been running into a great problem with finding buyers homes.

Usually there’s always 10-15 properties that fit the bill for my buyer, I’ve been curious because of the lower number of properties I’ve been able to find. We’ve also had a great reduction in total available foreclosures for buyers.

There are a total of 341 Single family properties (Condos incldued) for sale, with a total of 55 properties under contract, this leads us to a 16.1% current pending rate. This is great news for sellers as in a situation like this, the average appreciation usually goes up due to fewer homes available to buyers. Many times this will end in properties with multiple offers, which usually increases final sales prices.

Wanted to post updated statistics of what’s going on in Pickaway county regarding foreclosures.

Overall we’re down GREATLY from the same period in 2007 when there were about 35 or so active foreclosures on the market.

As of today, the system I’ve built to track active foreclosure in Pickaway county says we have about 13 current active foreclosures. This of course does not include HUD listings, which have been removed due to a conflict with the last management company, they are in transition and should hit the market by the end of the month. This will increase the total number of what’s available, although it shouldn’t be more than 10 county-wide.

Total number of homes available at sheriff’s sale this time is up greatly from last year (About a 30% increase) although my feeling is not all of these will make it to the auction.

• Chase 4
• Wells Fargo 9
• Saxon Mortgage Company 1
• GMAC Mortgage 3
• Huntington Bank 1
• Bank of New York 5
• Countrywide 4
• LaSalle Bank 1
• PHH Mortgage 1
• 5/3rd 2
• Glouster Community Bank 1
• JP Morgan Chase 1 (Commercial)
• National City Mortgage 5
• US Bank 7
• New Century Mortgage (Now Carrington) 1
• Deutsche Bank National Trust 5
• The Savings Bank 1
• Southern Point Subdivision 1 (Corporation)
• HSBC 2
• CITI Mortgage 1
• American Home Mortgage Services 1

Total till mid May : 56

This number is up greatly from the same period last year, and so far from my personal research there have been just about 68 total foreclosure filings in the county this year.

IF these mortgages aren’t mitigated, we might see a good deal of foreclosures on the market. What’s interesting is the shift from Countrywide and Deutche Bank to Wells Fargo and the Bank of New York. I don’t know of a reason for the shift, but it’s interesting to note due to the fact that the majority of foreclosures last year were with a few banks, this time around there with quite a diverse group.

I wanted to post up a message to try to address the questions that I’ve been frequently emailed from real estate agents, asking me just how to list REO properties.

I want to start out and say, I don’t specialize in REO listings, although as time goes on, I feel that I will gravitate more towards this field. Right now , I specialize in representing REO buyers….Which is something that very few agents want to do, and so far I haven’t met a SINGLE agent who claimed this as their specialty.

 This is by no means, the only way to do this, but I feel it’s most effective, because any agent that wishes to deal with REOs needs to understand the full scope of things, and not assume this is a easy field of work by any means.

1.  Establish a line of credit at a local bank for NO LESS than $30,000 as operating capital for your new REO Business
2. Get a list of properties headed for foreclosure in your area
3. Contact the foreclosing lender
4. Through phone or physical contact, find the REO department or other asset overseer
5. Contact that department or the outsourced asset management
6. Send a application to the vendor
7. Wait for them to send listings

See , now wasn’t that easy?

I’m not going to provide great details on this, but it should put anyone on the right track, if you follow the steps, you could be listing REO properties in as soon as 2-3 years. It takes time to get a relationship set up with a bank and meet their requirements. Most ask for 2-3 years in the REO business and a # of REO handled assets as listings.

I wanted to post this up, as I’ve been dealing with several people and been contacted by other agents regarding short sales and foreclosures

Many homeowners  are facing the prospect of foreclosure due to many circumstances.

 A Foreclosure the action a bank pursues (Normally) when a buyer can no longer make payments for the property they have a mortgage on.

 Homeowners may stop making payments for a myriad of reasons, lost jobs, health issues, increase in interest rate or maybe just because they don’t want to any more.

Foreclosure times may vary by state, it can be as little as 30 days , or as much as  year or more (It’s quite high in my area).

 If you are facing foreclosure there’s a order that you should go in to find your options. I suggest this for EVERYONE I work with to determine the best course of action.

#1 Determine why you can no longer afford the home. Is it because of a lost job or a change in personal circumstance? Or do you need to move somewhere else and don’t want to make payments on it. If you can’t make payments on it due to insufficient funds, you need to either try and increase your income to meet the demands of the mortgage payment, or find a way to remove the mortgage or reduce it.

2# Valuate the home facing foreclosure. I run in to FAR too many homes that end up in foreclosure that could of been easily prevented. In some cases , the homeowner could of MADE money by selling it and moving. In one instance the homeowner could of made $35,000 if they would of known the proper value of their property. The best way to do things is to have a real estate agent (Or a few) give you a good market value of your property. Doing this is free and usually doesn’t obligate you to using that real estate agent, should they be needed.

If you’re barely making payments (or not at all) on the home, CALL YOUR LENDER and see if they can reduce the interest rate, hold it back or anything of the sort. Banks don’t WANT to foreclose , contrary to popular belief, it’s extremely expensive for them to do so, and they almost always loose money on foreclosure. In some instances, you can refinance the property with a lower interest rate, or re-amortize the loan to reduce the payments. Both are potential options should you find you just don’t have enough cash.

 If you can no longer make payments, and can not sell the home and break even or make money. Contact a real estate agent that can perform a short sale for you. If you don’t know of one that’s in the business of doing a short sale, you can contact me and I will set you up with an agent that knows how to do one. Unlike a normal sale, your lender will pay the real estate commission for  the sale of the property. In many cases , the bank will sign off on any due amount to them, and the property can be sold for less than the amount owed. Some banks will even give the homeowner moving expenses to cover things. This is great for when a property has negative equity due to market corrections.

As always, consult a professional in the appropriate field if you’re facing foreclosure. Most of these things can be done for free, and in some instances , they can make you a little bit of money in the process, or cover moving expenses.

Today I received an email from yet another individual who has found my blog, looking for “Direct REO Bulk Sellers”. Meaning individuals at a bank or mortgage company who are willing to sell their properties in bulk packages of dozens, hundreds or even thousands of properties all at once.

 I’ve spent quite a few hours of research into this topic, as it was quite interesting due to the sheer number of inquiries I have people who “Have a buyer and is looking for $100,000,000 Worth of REOs”. It could certainly be a great way to make money , even at 1/2% of the total sum, that’s $500,000 for hopefully not alot of work.

Now , I don’t know about your neck of the woods, but $500,000 in my pocket equates to about around the next 10-15 years of my life. Why wouldn’t I want a part of something THIS spectacular and BIG?

So, I started digging in a GREAT network that of (BiggerPockets) that has alot of actual real estate investors that share experiences in every avenue of real estate. From foreclosures to raw land deals, to even Bulk REO Portfolios, there’s a dedicated section to it.

I was inundated with the sheer number of people who had “Actual Buyers” and “Actual Sellers” of bulk REO portfolios up to 5 BILLION Dollars (Yes, that’s a 5 with 9 zeroes behind it) in REO properties that are sitting somewhere in the US and the seller just absolutely has to sell them at 40% of the market value…who knows why they want to sell at a loss of 60% from the market value, but they just want to do it.

 So, after finding all these individuals who had information , I tried to find out who actually sells these bulk REO Packages, as it seemed they were everywhere.

I tried around a dozen or so sources to find a package for a individual who had contacted me through one of my websites/blogs about buying a REO Package. After a week or so , I was quite tired of using every possible keyword on Google to try and find these sellers.

I eventually found ONE GUY who I felt was legitimate, and attempted to set the buyer up with him.

I realized that this whole Bulk REO deal thing was starting to seem shady, so I started doing research in to actually how many dollars and cents have been transferred in non NPN (Non Performing Note) sales, but bulk REO Portfolios. As NPNs are transfer all the time and it’s not that major of a thing to get NPN deals or the like.

Well ,after I did all my research , I was amazed to find that fewer than 5 TOTAL DEALS have been closed in the USA with Bulk REO Sales. As of my last checking, the total was around 250 million or so between all these deals. Finding this odd, I contacted EVERY SINGLE PERSON that I had come in to contact through this process and asked them the simple question of “How many have you closed as of today, and how many do you have pending” and the answer was an astonishing ZERO. Several told me they were under contract, but even then the deal was shaky at best.

I did research these deals that had closed, and found out one thing…They weren’t from people using on-line services, they were people who knew other people at large banking/mortgage firms, and had the ability to fly across the US to set up these deals. They put alot of work, and none of them had any involvement with on-line services, finders, buyer mandates or the like, but good ol ground pounding financial work.

Sad but true in my case…….

Wanted to post this little tidbit up , from my understanding there are alot of people who currently don’t know the situation with New Century Mortgage.

 Anyways, some time last year, New Century Mortgage, a Division of Deutsche bank went bankrupt and was purchased by Carrington mortgage. Unfortunately there are many people out there who don’t realize that you NOW deal with Carrington Mortgage concerning short sales and the like.

Carrington Mortgage’s number is 1-800-561-4567

 I hope this helps clarify things.

I’ve continued to have many individuals who are curious about getting a list of foreclosures in specific areas of the country.

Some of you have “heard through the grapevine” that the County Court, or other types of government publishes a list of foreclosed real estate in the area they cover.

This is TRUE to a point, they do publish lists, but it’s the list of DELINQUENT homeowners in which the bank has issued a foreclosure notice (In my state, sued the homeowner to start the foreclosure).

This list is only mildly helpful to someone who wishes to purchase a foreclosure. Only a percentage of these properties will go to the lender’s REO portfolio. Some will work a deal out with the bank, some will declare bankruptcy and slow the process down , while others will do other things.

So, lets get on to the “Lists”

Unfortunately, there really is no list of foreclosures in any specific area, many websites will charge a individual a fee to get a “List” of properties. These lists are almost always out of date, and many times have incorrect information. Most of the time, this is due to the way the website gets their information, NOT because they want to rip you off.

For instance, a individual called me one day concerning a property I had for sale in Stoutsville, Ohio. The property was owned by JP Morgan Chase bank , and was listed at $124,900. The home was in fair condition, and only needed the carpet replaced and re-painted. The website was showing that the ASKING price for the property was $85,000, and they were absolutely convinced that the bank would take $85,000 for it because this particular BIG website was stating that the foreclosure value was $85,000. Unfortunately this was false, the bank had purchased it at $85,000 which was 2/3rds of the appraised value set by the county. The home was worth around $120,000 or so. Not having real, viable information about the property wasted the buyers time, and my time as well. The property eventually sold for $118,500 and the buyers were thrilled with the home, because the repaired  value (After carpet and paint) was in the $130s.

The BEST way to get a PARTIAL list of what’s available to the market is by visiting various bank websites that show their REO portfolio that is for sale. Below you’ll find a partial list of those websites.

 http://www.ocwen.com/reo/home.cfm      (OCWEN FINANCIAL)

http://iasreo.com/homesforsale.aspx          (Intergrated Asset, Which handles JP Morgan Chase REO and others)

https://www.reotrans.com/index.cfm?event=public.homepage&homepage=buyers   (Multiple Banks)

http://www.reosource.com/findahome_FAREO.html (First American which has SOME Deutsche Bank Properties)

http://www.us.hsbc.com/1/2/3/personal/home-loans/properties (HSBC Bank REO Listings)

http://www.countrywide.com/purchase/f_reo.asp (Countrywide REO Department Listings)

Now that I’ve given you a list of some of the banks and Asset management companies that have foreclosure listings, I’ll tell you the sad truth.

The websites given only list approximately 10% of what’s REALLY on the market in terms of foreclosures. I know in my specific town, they only show that there is only ONE home for sale in my town is for sale. I know for a fact that there is a minimum of 15 homes for sale , with about 30 that are in a state of pre-foreclosure (That is delequent, and in some stage of the bank attempting to foreclose on the homeowner.

Now, How do you get a list of what’s REALLY on the market, without going to 20 bank websites which only cover a small portion of what’s on the market?

Easy , Send me a email and I’ll set you up with a REO specialist for your area, It’s easy, and FREE, and will actually save you money, because they know how the whole REO battlefield works. My Email address is Brandon.Schlichter@RealLiving.com .   All I need is your Name , Phone Number, Email Address and whether you’ve been pre-approved for a mortgage or not.

 REOs are definitely a different kind of world when it comes to real estate, and you HAVE to know what you’re getting in to.

Figured I’d blog about my new listing on East Fork Road in Laurelville Ohio.

 It’s a great little cabin.

We’ve had quite a few showings on it already from developers and individuals looking to have a cabin business in the hocking hills area. It’s less than 10 minutes outside of the town of Laurelville, making it about 35 Minutes away from Circleville, 35 From lancaster, and about 25 minutes away from logan.

From my udnerstanding it’s one of two total homes in Hocking County that were built entirely out of stone (Foundation and structure).

 It’s currently priced at $109,900 and the seller is quite motivated to sell the home.

It needs some work as well, but from what I can tell , it’s nothing that major, the bathroom and utility/well pump room need redone.

We’re definitely down in total volume that is labeled as foreclosures currently.

 Now, I want to make a note about the numbers  I Give :

 Even for real estate agents in the Central Ohio area, there is no “List” of foreclosures that are for sale. Banks usually contact local real estate agents by way of foreclosure management companies to market their properties.

The foreclosures are almost always required to be submitted to the local MLS to be marketed to agents, and they also make their way to national websites like Realtor.com

So, in order to track foreclosure information on the MLS , I’ve set up a syntax search, that will pick up on MLS listings with certain key-phrases that are used in REO/Foreclosure listings. Some listings that are foreclosures do not end up in the list, and some non-foreclosures end up in the list, but I really feel that my system is the most accurate system available in our area (I don’t think anyone else does what I do).

So here’s what the market looks like (Looking backwards) To the present.

TOTAL Foreclosures sold in 2005 : 75 (14% of total Sales)

TOTAL Foreclosures sold in 2006 : 92 (19% of total sales)

TOTAL Foreclosures sold in 2007 : 116 (25% of total Sales)

Total Foreclosures Sold YTD in 2008 : 15 (36% of total sales)

Current ACTIVE Foreclosures : 30 (8% of total actives)

Current Total Pending Properties : 16 (35.5% of total Pendings)

 So , if you take my numbers with a grain of salt you’ll find.

#1 Foreclosures are Up quite a bit from 2005 and 2006.

#2 The total number of ACTIVE foreclosures are DOWN a bit from this point in 2007, but I personally expect equal sold foreclosures.

#3 The total FORWARD LOOKING (Pendings) Rate is down from jan-mid feb.