Wholesale is the next level of REO buying for experienced wholesale buyers. Basically, it’s about going from dabbling with smaller REO packages to swimming with the sharks. Like one of them. As intimidating as it sounds, wholesale REO is actually an easy process to follow. Bulk REO wholesale takes advantage of a small window of time when REO properties are available for quick purchase in national and state joint foreclosures before moving into traditional liquidation programs. With wholesale bulk REO, time and quick action are everything. Once the deal is gone, it’s gone.
Wholesale REO is available through access to property inventory from top 50 banks, hedge funds, insurance inventories, and mortgage companies. With a minimum order of $10,000,000 to unlimited, the possibilities are endless. With something as good as wholesale bulk REO, there are few special requirements, representations, warranties, and instructions that must be followed.
In order to get a fast train to wholesale bulk REO, there are a few requirements:
•1 Mutual Non-Circumvention/Non-Disclosure Agreement signed
•2 signed buyer profile form
•3 Custom Signed Purchase Order Form
•4 Letter of Intent
•5 Letter of Credibility/Credit
Representations and Warranties for REO Wholesale Bulk Include:
• Portfolio and Order Profile:
•Assets are sold as is
•The procurement division will attempt to match the asset pool to the buyer’s profile and custom order.
•Exceptions are minimal
• Picking/choice not available
•Proprietary funds are formed from one or more asset providers.
• Purchase Contracts
•Variable depending on the case
• Representations of assets:
•Fully embargoed
•No outstanding bonds or encumbrances
• Issuance of clean title commitment at closing
•Buyer pays other closing costs
Special instructions for REO bulk wholesale include:
•For a Pre-Program, depending on the case:
•Full Mutual Non-Circumvention/Non-Disclosure Agreement (one time only)
•Buyer profile form completed (only once)
• Complete custom purchase order form (for each order)
•Send letter of intent (see example below – should be on buyer’s personal or company letterhead. Must include profile information, purchase order, exit strategy, and future order intentions. Must be in the form of a paragraph)
•Submit Letter of Credibility/Credit – This is NOT Proof of Funds. The letter must be from a bank, mortgage broker, hard money lender or attorney, stating that the buyer can meet the requested portfolio size.
•Have proof of funds available to provide directly to the source
For source:
•SourceContact
•Source will contact the buyer.
•Source works directly with the buyer, after completing Proof of Background and verification
• Realization of personalized orders
•The list of properties is delivered to the buyer
•Due diligence period is three to five days, depending on the source
•Properties must be verified with the source
•Closing involves working with Title Company
While wholesale bulk REO requires some effort and qualification, the discounts and profit generated are worth the little work involved. Anyone who invests in real estate and dreams of making it big is encouraged to take the time and effort to explore REO in bulk wholesale.
