Wholesale is the next level of REO buying for experienced wholesale buyers. It’s basically splashing around with small REO packages to swim with the sharks. Like one of them. As daunting as it may seem, wholesale REO is really an easy process to follow. Wholesale Bulk REO takes advantage of a small window of time where REO properties are available for quick purchase in national and state pools before they are transferred to traditional liquidation programs. With massive REO timing and fast-paced action, that’s it. Once the case is gone, it is gone.
Wholesale REO is available through exclusive access to inventories from the top 50 banks, hedge funds, insurance inventories and mortgage companies. With a minimum order set at $10,000,000 to unlimited, the possibilities are endless. With something as good as bulk bulk REO, there are few requirements, representations, warranties, and special instructions to follow.
To get a fast train to bulk REO wholesale, there are few requirements:
• 1 signed mutual non-circumvention/non-disclosure agreement
• 2 signed buyer profile forms
• 3 personalized signed purchase orders
• 4 letters of intent
• 5 letters of credibility/credit
Representations and warranties for Bulk Wholesale REOs include:
• Wallet and order profile:
• Assets are sold as is
• The acquisitions division will try to match the asset pool with the buyer profile and the custom order
• Exceptions are minimal
• Pickup/choice not available
• Property pools are formed from one or more asset providers.
• Purchase contracts
• Variable on a case-by-case basis
• Asset representations:
• Fully seized
• No outstanding liens or encumbrances
• Issuance of clear title commitment at closing
• The buyer bears the other closing costs
Special instructions for Bulk REO Wholesale include:
•For a Pre-Program, depending on the case:
• Full mutual non-circumvention/non-disclosure agreement (one time only)
• Complete the buyer profile form (one time only)
• Complete the personalized order form (for each order)
• Submit a Letter of Intent (see sample below: must be on buyer’s personal or company letterhead. Must include profile information, purchase order, exit strategy and future order intentions. Must be written in paragraph form)
• Submit a Letter of Credibility/Credit: This is NOT proof of funds. The letter should be from a bank, mortgage broker, money lender, or attorney stating that the buyer can carry the size of the portfolio requested by the buyer.
• Have proof of funds available to provide directly to the source
• Source contact
• The source will contact the buyer.
• Source works directly with buyer, once proof of funds and verification is complete
• Placement of personalized orders
• The list of properties is given to the buyer
• The 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
Although wholesale bulk REO requires effort and skill, the discounts and profits generated are well worth the little work involved. Anyone investing in real estate with dreams of going big is well advised to take the time and effort to explore REO in bulk.