From the category archives:
banks
How to find an amazing deal on a bank-owned property
Last Monday, one of my co-investors asked me how the multi-billion dollar economic bailout would affect Seller Financing and other similar financing techniques.
I think we are still a ways away from seeing much effect from the bailout on regular mortgages and loans. Even with relief, banks will still be bloated with foreclosed properties they are desperately trying to unload.
So, how do you find a great deal on an REO or bank-owned property? Here are a few tips:
1. Focus on small credit unions and banks. You can often find the REO portfolios for these local banks on their websites.
2. Look for the income-producing properties in the REO porfolio first.
3. As I’ve said before, banks WILL seller finance to you. However, DO NOT just walk in and “ask for Seller Financing”.
4. Instead, visit your bank’s REO representative, and tell them, “We are willing to purchase any of your REO / Loss Mitigation / Bad Debt portfolio list that:
- Meet our criteria, OR
- You (the bank) are willing to finance
Those are just a few tips. You can find more on any one of my recent Training Calls and Webinars.
I’ve also just introduced a new tool called “THE List” that is helping many of my students uncover amazing new Seller Financing opportunities. I’ve called this tool, “The Most Profitable Tool In Today’s Real Estate Market!”. If you’re serious about finding and profiting on real estate deals right now, this tool should be one of the big guns in your “Non-Compete” arsenal.
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Banks are afraid! Use that fear to lower your interest rate.
If you’ve been reading my blog, you know that banks are willing to just about anything to get rid of bad debt (their REO portfolios). Banks are also afraid of more properties entering their REO portfolios. At the most basic level, they want to avoid foreclosing on any more loans – almost at any cost.
In our current market, I am seeing people harness that fear to lower the interest rate on a loan they have. Here is a simple scenario of how that might work, where a Property Owner goes into meet with a Bank VP:
Property Owner: Hello Mr. Bank VP! Times are tough, I’m worried about not making my next mortgage payment.
Bank VP: That’s too bad, I wish we could help.
Property Owner: Actually, you can!
Bank VP: Oh?
Property Owner: I think all I need is a slight reduction in the interest rate, and I’d be able to keep my head above water.
Bank VP: Hmmm, we really can’t do that.
Property Owner: Well, in that case I’m afraid things don’t look good. With the way things are going, I don’t think I’ll be able to make the December payment. Do you really want to foreclose on another loan?
Bank VP: Not really, bu-
Property Owner: - I recently saw your REO portfolio on your website, and its huge. Really, all I need is a slight reduction on my rate, and we’ll keep me OFF that list of bad debt properties eating away at your profts.
Bank VP: Well, that makes sense, What if we….
And you’re off to the races!
It CAN be that simple. Many of you are owners of investment properties and income-producing properties that are in legitimate distress. Many of you are negotiating with banks to buy properties. Talk to your bank. Don’t take NO for an answer. I recently took a variety of questions about this topic on a Seller Financing Q&A Training Call with my students. You can now access a free recording of that call.
Over the next few days, I’ll talk about how to make a non-assumable loan ASSUMABLE, and how to find amazing deals in distressed REO portfolios at your local banks. Stay tuned!
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