I've been in the business for 19 years and in june i'll be 20 years. Which make me ancient in this business. Yes it's true, because mostly the investors they got it during the bubble or during or left right after the bubble.
Now very few people have stuck around. During that time i have been involved in 700 transactions of different kinds.
I've wholesaled, I've done rehab, i used to buy and notes for a while. I've done commercial and residential lending. For the past 7 years now, i've been a private lender to investors and wholesalers in buy, fix and sell business.
I wanna share some very smart that a gentleman by the name of Confucius said and what he said was "Man who chases many chickens, catches none".
The reason i mention this is because there's a lot of people hear about different webinars on different subjects on short sales and this and that. They are have hundreds of different ways to make money in real estate, I'm gonna show you why dealing with REO's is far the best way and why considering focusing strictly on REO's
Now you definitely focus on one strategy which you don't wanna do is doing a short sale here, try to do foreclosure there or do a loan mod and do all this things and end up failing in all of them, not making money at all.
What you do is concentrate on one thing, make it some money for you and get really really good at it. Once you a have a cash cow you can do anything you want. You can stay in the business, do something else or go on vacation.
What is the best strategy? Im talking about buying or flipping REOs. When i mean buying a lot of you out there who are basically rehabbers and you want to buy properties, fix 'em up and sell 'em.
Folks, the best deals that you gonna get are REOs and of course when i mean an REO is also mean a Bank Owned Property.
There's a couple of people that asks a little about REOs. Basically an REO is when a homeowner fails to pay their mortgage payments the bank files what is called a Foreclosure suit.
Eventually through the foreclosure process unless the owner pays off the mortgage or sells it which you can't really do, then the property goes for foreclosure and it gets transferred back to the bank. At that point the bank nows own the property and calls it an REO. It's internal term calling Real Estate Owned.
Now, here's where the tremendous opportunity is right now. Here's a quick information on realtytrac.com.
If you ever hear like CNN or the Wall Street Journal whatever quote on any statistics there quoting realtytrac.com. And now just with the latest stats that were out of February they we're up 30% from a year ago.
In 2008 there were 2.3 million properties in foreclosure. So even the government now decides to buy all this assets there are still 2.3 million in the pipeline that need to be dealt with.
What do you think is gonna happen to those 99% of thoser foreclosures? They are becoming REO's there's just can't happen to them.
So what does happen to those REO properties? Here's the good news folks, banks they can't keep them. They can't rent them out. They re legally obligated to sell them.
So that's not gonna change anytime soon, you not gonna see banks as landlords. Banks are the ultimate motivated seller, if you gonna buying a property, banks are the way to go. If your buying from an individual seller often times a seller is emotionally attached to their property, they grew up their or they won't sell it at the price you need to buy.
The Banks can sell it at a lower price because there's no mortgage on their. There's a lot of seller that would love to just give you their property bu there's nothing there if the mortgage is more than the property's worth.
So even they could sell it to you if they wanted to, they can't.So the banks sooner or later they have to sell it's not the matter of IF, it's the matter of WHEN. That's what i call the ultimate motivated seller.
There are many ideas and many concepts about wholesaling and buying REO's that are simply wrong.
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