The U. S. REO flea market

[rburns]

This is for serious investors who can buy over 4,100 market value homes at 8% below market value.
These homes, along with Condos are available in the United States but the United States also has
this ridicules secondary market based on silly Cash Flow schemes. Don't fall for them!

They're trying to sell foreclosed property held by companies that are going broke for selling mortgages
to people who didn't qualify. Only in America could this happen. Believe me, I live there.

You sell subprime mortgages to people who otherwise couldn't get one. They can't keep up so the
property is reclaimed by a mortgage lender who can't afford to pay the bank for lending them the
money to back the mortgage in the first place. What happens with that?

A secondary market, REO, opens up buying these homes for 40 cents on the dollar and
all of a sudden people are representing companies with billions of dollars to buy them.
Nonsense, it's still the bank that owns the property and it's the bank and bank alone you can buy
it from.

One bank has over 4,100 homes they'll sell at 8% below market value but these REO people
are sure they can get stuff at 70% off. From whom, Joe & Ed's bank? Not Citigroup.
Beware of anything in the United States sold with REO attached to it if you're not buying it
directly from the bank and be especially cynical of those who can get you involved in REO.

[rama1]

I agree with Robert -- this is going on right now in some states in Florida in particular. Just remember that investment, especially, overseas, is a tough call to make.

[coralpink]

I gather you are based in U.S. and wondered if you could throw any positive light on my situation. I went on an inspection trip to Orlando in July with a large property Co. with a view to looking at some villas, but once there, realised that Villas were not a good investment option, and was persuaded to look at some condo's. The one that the Company put me up in, was very nice indeed, but way above my budget.
I felt uncomfortable with the subtle, but not willing to take NO for an answer Sales Strategy. I decided to walk away from the Company and offered to leave the apartment they put me up in and told them they were showing me places that were way beyond my budget, so the rep then told me they had a resale condo which was within my price range, and they assured me that I would not find it difficult obtaining a loan Although I told them my salary was not very high, but have equity, in my two properties in U.K.

I was introduced to two finance companies by them, who have so far failed to secure me the loan of around £100K, but have not actually come back and give me an answer either way. I have supplied them, with all the information they have requested, and the closing date has been extended twice. I am really at my wits end, but the property Co. seem so determined not to lose the sale, that they will not listen to me when I tell them I want to pull out of the sale, as I cannot get a loan. They keep hoping they can get me one, once the Sub Prime problem is cleared up, but it looks like it is going on for a lot longer than anyone anticipated. do you think there's any hope of me getting my money back ? It does say in the contract that if buyer fails to secure finance, deposits will be returned. I really do not know what steps to take next, and would appreciate any advice from anyone more familiar with the U.S. mortgage/housing market.

Many thanks

Coralpink

[sameer.dada]

I'm interested in buying property in the US for flipping after renovating. Would really be grateful for any advice.

Buying REO or foreclosures is better?
When buying these do we get to see a report of a survey about the exact condition of the house. The things you can't see in pictures Ie. plumbing, wiring, internal etc. ( to avoid surprises later which add cost and time for repairs).
Is it better to hire 1 contractor to do the whole renovation? Do they supply the material or do we need to buy separately? Ie wooden floors, paint, tiles etc.

How many bedrooms in a house for best flip potential?

How to know where the best location is? Is there any info online about home buyer's index/statistics in particular suburbs?

Thank you in advance for any input or feedback.

[rburns]

REO bulk sales, flipping and Real Estate investment can be categorized in three ways:

Flipping can be a little bit of cash, RE investing can be a lot of cash and REO is a Box Car load of cash. Portfolios usually start at $5 million USD and that's low. Finding who holds the notes, everyone says they have access, isn't all that easy and most who say they are direct to the source are not. A lot of Fee Chasers out there who expect to be paid because their Uncle's barber knows someone who knows someone else who knows someone who's direct to someone who knows the person who is direct to the source. RUBBISH!

Banks aren't making loans in the U.S. unless you have double the amount in another account and the only people playing the REO game have billions in cash at the ready. I have access to the cash but haven't found anyone who can sell. Not even the banks. What are they waiting for I wonder? With Fannie Mae and Freddie Mac going under over the weekend; I'd say the denial game is over. Will that open the market or will the cost just become greater? I'll bet on the latter.

[sameer.dada]

Thanks rburns.

So banks in the US don't lend without significant collateral? In which case you make a good point about this.

[rburns]

If you just want to flip, you could probably get a mortgage by putting 20 to 35% of it down. Your problem comes in your buyer's ability to cover the new mortgage.
If you want to buy Scratch and Dent REO to flip; you're looking at a minimum of 5M USD for a pool or buying a single property from a bank or Mortgage company.

[sameer.dada]

thanks again. that is much more than i have to spend. my capital is limited to 150,000 usd.

[desres]

Hi
Read your ad with interest-- i have been looking into foreclosures & found a couple of houses that were especailly good, i found these thru an agency can u tell me how i can buy direct from a Bank ? ? any website etc

Thks
Desres

Originally Posted by rburns

This is for serious investors who can buy over 4,100 market value homes at 8% below market value.
These homes, along with Condos are available in the United States but the United States also has
this ridicules secondary market based on silly Cash Flow schemes. Don't fall for them!

They're trying to sell foreclosed property held by companies that are going broke for selling mortgages
to people who didn't qualify. Only in America could this happen. Believe me, I live there.

You sell subprime mortgages to people who otherwise couldn't get one. They can't keep up so the
property is reclaimed by a mortgage lender who can't afford to pay the bank for lending them the
money to back the mortgage in the first place. What happens with that?

A secondary market, REO, opens up buying these homes for 40 cents on the dollar and
all of a sudden people are representing companies with billions of dollars to buy them.
Nonsense, it's still the bank that owns the property and it's the bank and bank alone you can buy
it from.

One bank has over 4,100 homes they'll sell at 8% below market value but these REO people
are sure they can get stuff at 70% off. From whom, Joe & Ed's bank? Not Citigroup.
Beware of anything in the United States sold with REO attached to it if you're not buying it
directly from the bank and be especially cynical of those who can get you involved in REO.

[rburns]

Unless it's a bulk purchase from a bank's service company, which costs too much, you buy a defaulted mortgage at auction. That is a job in itself, a tedious one, because if you don't check everything out yourself; you have no idea of what you'll get stuck with. This is really a big money game and unless you have the time to put in on it; buying single or several foreclosures is anything but easy. Before you start I strongly suggest you get yourself a good real estate lawyer to point out the many pit falls you may encounter. Unless you know finance and have the money behind you, stay away from all the REO BS on the internet. Even the serious investors are getting fed up with all the fraud. A few are legit though.

If anyone says "I can get," or "I know someone" it means they don't have anything and you don't want to do business with them. They're just looking to get in on the fee paid in a big sale. Do yourself a favor and get that lawyer first.