Monday, August 15, 2011

How To Wholesale Bank Own Houses

Banks have begun putting large quantities of their real estate owned (REO) properties on the market. This action has created a huge amount of inventory in the housing market. When banks dump their distressed property, it leads to sharp declines in housing prices. This is good news for investors, as there are amazing bargains to be taken advantage now. If you are a real estate wholesaler, you will find that it is far easier and more efficient to look for REO properties on the MLS to do wholesale deals, rather then then trying to find them driving all over town.

I recently placed an ad on Craigslist for a bargain priced house that I had under contract and I received an average of 30 phone calls a day for this property. This is at the same time the news media is saying how bad the housing market is. Prices are so low at the moment that bargain hunters have come out of the wood work. Anyone that has cash knows that now is the time to buy. This is why it's a good time to be a wholesaler.

As a real estate wholesaler, you submit a contract on a REO property to the bank, then after the bank accepts your offer, you "deliver" it to the cash investor. You are probably saying that cash investors look on the MLS themselves. but the key is to beat them to it. If you can spot a great deal and get it under contract before they do, you win. The cash investor is going to have to buy it from you.

Many cash investors that are looking to buy rental properties. This is why there is such fierce competition. The key to success is to submit your offer tt the bank and get it approved first. When I send out an email to my buyers list they are usually sold to in less than 48 hours.

What You Need To Win Deals:

1. Proof of Funds Letter

If you have cash available, you can print out a bank statement showing that you have the cash available to purchase the house. If you do not have the cash available then you need to find someone that does have the cash. You can ask a private investor or a family member for the cash to provide you with a proof of funds letter. Another option is to get a proof of funds letter from a transactional funding company such as Best Transactional Funding

2. Cashiers Check For The Deposit

You will need a minimum of $1,000 dollar deposit in order to submit a purchase contract on a bank owned property.

3. Purchase Contract

Banks do not allow you to assign contracts. This means that you cannot simply put the words "and or assigns" next to your name and use an assignment of contract form. You are going to need to purchase the property in either your name, the name of a company or in a land trust. Land trusts may or may not work depending on how the bank feels about them. They don't want to see you making money on their property

Once you have submitted a contract, you will wait for the bank to contact the listing agent. The bank will probably counter your offer. For example if a house is listed at $60,000 and you offer $50,000 they might counter you at $58,000. Then you should counter them back until you reach your maximum offer price at which you do not agree to go any higher. Once the bank agrees to your price and signed the contract, you have the deal and will execute the contract. Start marketing the property ( if you dont have your buyer lined up already)

What's next? Simple, its time to go cash your check.

Duncan Wierman is the creator of specialized software that not only hunts down the best deals, but also allows you to make hundreds of offers in minutes via email, fax and text. He's the original Real Estate Automation Systems Expert. For more details on how his software can help you make more money faster , check out his seven day $1 dollar trial at :

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