You must be logged in to reply to this topic.
-
Hello Everyone,
Saw a post about a guy who flips REOs from banks. I am going to contact some (lenders big and small) and get this project moving. Looking for any insight.
From what I can gather he:
1) Contracts the property for the least amount with the bank. Let’s use 25K as an arbitrary number.
2) Wholesales it for 75K. The fees between 25k-75k is his.
3) Lists himself as the agent (collects commission)
4) Collects wholesale fee.Thanks,
KimberlySorry, but I don’t believe any of this.
If he is the agent, he has a fudiciary responsiblity to the bank to get them as much as possible. If he is making a bigger profit than they are, he can go to prison. It has happened before.
I would not recommend trying to flip REOs if you are an agent or if you are not an agent.
If you read the purchase contract for buying REO’s it will say that the contract cannot be assigned, that you cannot resell within a certain time frame. It is very difficutlt to wholesale flip REOs. It can be done but, it has been my experience that it will not work will with REOs from big banks, or properties where the agent has an exclusive relationship with the bank.
The only way you may be able to get it to work is if there is no agent involved and if you are dealing with a small local bank vs. the big national banks.
I don’t know what guy you are talking about but what he is talking about doing is illegal if he is an agent.
Unfortunately, there is a lot of BS out there in RE guru land.
Thanks Jackie.
I think you are right about smaller banks that need the houses off of their books and the part about taking commission out of the deal didn’t sit well with me but I didn’t know it was criminal! . This guy isn’t selling anything system, he made a post about what he was doing. I’m thinking he doesn’t know the potential illegality of his “niche”Kimberly
You must be logged in to reply to this topic.
