How I do so many REO deals, 19 ways to RULE your REO market; janitor make yearly income on ONE deal.

by | Uncategorized, Indy Anna, Real Estate Investing

REO Deals 19 ways to do more

How do I do so many REO deals?  Janitors makes over 40k on ONE of my REO deals, more than a yearly income on just ONE deal.

First of all, THANK YOU again for making this channel the number one channel for Indiana real estate on YouTube according google analytics and SocialBlade info for BigReia.com.

One my agents asked:

“Anna you are doing more REO deals than almost any investor I know of, how are you doing this what’s your secret?”  

It is a lot simpler than you probably think lol.

In this video
– I’ll explain the REO process
– If you do this right you can cheap properties and make good money, if you build the relationships right you can make money now AND later as the real equity is in the relationships
– I’ll go over 19 ways to make sure you get the best REO deals no matter how crowded or competitive your market is
– I do these deals now but at first I just helped my investors do them and YES you can assign and wholesale REO deals so you can start with that and get to your first 10k/month by using these steps I’m about to outline
– So do them for yourself or help your investors do it, and you’ll be cleaning up in no time

What is an REO
– Real Estate Owned (by the bank)
– This means the foreclosure process was gone through the property went to auction and didn’t nobody want none so they bank got it bank… and the do NOT want it
– Now they bank needs to get rid of it

There are basically FIVE phases:

1.)  Seller gets behind on payments.

The seller doesn’t make their mortgage payment on time and they have about 90 days or three late payments (usually) before the next step happens.  Sometimes they have much more time but they will normally have at least 90 days.

2.)  Notice of Default (NOD) filed.

This is the Notice of Default lawsuit (Lis Pendens) that is filed by the bank against the homeowner, this is a matter of public record also know as pre-foreclosure.  This can take a LONG time the most I’ve seen is seven years with no payment!  I’ve heard of longer but never saw it for myself.  Update: now my longest is NINE years.

For more about the foreclosure process you can check out Azam’s epic post on 30 ways to buy real estate zero down. 

Usually this will only happen in big “blue” (democratic) cities.  The “red” states are usually more friendly for landlords.

3.)  Actual Foreclosure.

Now the homeowner has to leave if they don’t sell or make good on the back payments to the bank.  The seller may go to court and try to fight this but either this phase is the actual foreclosure.

4.)  The Auction.

The bank will do a county courthouse auction and sell to the highest bidder who has an offer that the bank is willing to accept.  When people say “Buy at the auction” this is what they are talking about.

5.) The Bank Owns It.

If nobody buys the house at the auction then the bank owns the house and it is now an REO or “real estate owned” property.

There are a other things here to consider like redemption rights, asking that the banks provides a proof of debt or proof of note or Produce the Note, fighting the bank in court to prove their “standing” or something else, etc.  These are all ways that the seller can fight the bank and I’ve covered these in other videos so you can check those out for more homeowner options. 

Here’s what you can do, here are 19 ways to WIN at this game and get/do more REO deals while your RUN your local real estate market:

Here are 19 steps you can take to dominate your REO market:

1.)  Find out who your local REO agents are.

The first thing that happens with an REO is that an asset manager is assigned to liquidate, BOA will have a contract with a realtor for listings, maybe some brokers, certain types of homes in any given market not many agents that get all those listings,  You want to find out who these people there are NOT many.

2.)  Contact them and find a way to help.

Those agents list the houses on the MLS, and the after MLS there are other sites like truilia, zillow, redfin, etc.  You can go back and search sold and previous transactions and active listings and find out who the REO agents are and start to help them.  You can help them like you would any other agent or investor, and the L/A Model is good start.

3.)  Let the agents know they can “Double Dip” their commission with you.

You will allow the realtor to represent you as the buyer so they got twice the commission.  Even if you have your real estate license you still want to offer this to the realtor.  When the realtor makes the buying AND selling commission they get twice as much money and this is often called a “Double Dip”.

4.)  As the relationship builds they let you know about deals that need WORK.

This is NOT about getting their “best” deals right away, you want to build the relationship.  Remember that a normal buyer or homeowner won’t be able to get financed or close a deal without bathrooms and a kitchen you can so use that to your advantage.  Ask them about their hard-to-move deals and you can start with them.

5.)  Make offers regardless of the asking price.

Just get an offer in no matter what.  Then explain your reasons for the price so that you seem reasonable and never like a weirdo or “tough” negotiator.  You don’t want to seem like a bozo or a flake either you want them to know that you mean business, this is why you explain the reasons and justification of your offer.

6.)  Focus on the closing date.

Often banks will get motivated at the end of a year or month.  So make sure your realtors know that you can close fast.  When you make offers that are below the asking or that seem “low” you can ask about any deadlines or end of the year/month timelines and possibly agree to close by that date. 

Getting houses off the books by a certain date can be a BIG motivation so for you to agree to close by a certain date can be more important than the price.

7.)  Justify your price.

Your BPO argument needs to be solid and evidence based.  You need a story as to why the price should be lower.  You want to have things like contractor quotes, crime in area, comps, new construction in OTHER areas (that will make the other areas more desirable), etc.  

As time goes on your realtor will learn that you are a no BS person.  So if YOU come back with a price and have a solid justification instead of them questioning your pricing they are more likely to go to the bank and question their pricing.

8.)  Use no contingency offers.

Just make cash offers and NO inspection clause.  I’ve talked about how to do “no inspection clause” deals and still be protected you can see my videos on that on our main page.

9.)  Sometimes use a 5 day inspection period then offer to remove as a Goodwill gesture.

This is a good lesson because it builds rapport when you are doing something special just for them.

10.)  Offer to put more Earnest Money down.

Earnest money is usually 5-10%.  So maybe you start low and then offer to add more if they meet you on price.  If nothing else it makes your realtor able to tell the bank that they twisted your arm and got a win out of you.

11.)   Always perform on what you say.

No matter what you want to follow through on what you say.  I knew this was important but Azam has really opened my eyes on why this is so important.  People do and will always remember/respect people who keep their word. 

One of my REO agents had a deal that wasn’t moving and it had been almost a full year.  One day he told me that I could come in with a WAY low ball offer if I just agreed to close by the end of the month.  I send in an offer that was less than a quarter of a price that I would’ve been happy with LOL.

The bank wasn’t happy…

They rejected it but since I was the only offer they asked the REO agent about me and if he was SURE that I really could close that fast on the deal.  My agent told his bank that:

“If Anna says she’ll do it, you can take it to the bank.”

That was how I got that killer deal.  Don’t waste time or you’ll burn the relationships, keep your word and be somebody that they trust will always deliver.

12.)  Remember you can still wholesale an REO.  (Yes, you can!)

You can wholesale REOs even if they don’t do do assignments.  You can explain the situation and get around this with something like a designated LLC and still do a single closing.  I’ve made a other videos and classes about how to assign “impossible” deals and non assignable deals so you can check that out too.

13.)  Buy the list of the other leads they generated.

Nobody has ever heard of this LOL.  You can offer to pay the agent more to get the list of all the other callers who called about that and their other properties.  Or you can pay for their investor list or do a mailing to them. 

I will pay an agent an extra $1,000 – $1,500 or more to get a list of their other callers and/or other investors OR to have them let their people know about my deal if I’m assigning it.

14.)  I get them buyers… for FREE.

I will also help my REO agents market their properties even if they need rehab and even if I don’t buy/own it.  This way when the realtor gets an investor (or if it is not me or if they already have one pending) then they will already have a line of buyers ready to go so it makes the realtor look like a hero.

Not many investors have a realtor that sells them an investment property and also has a pack of buyers to go along with it.

15.)  I send all the realtors a box of cookies and flowers right after we talk.

Nobody does this.

16.)  I give them deals in advance.

When I get deals I will often the best of my REO agents and realtors and let them know about my deals a day or more in advance.  If they can move it then we can split the profit.  This is HUGE because I’ve had many people tell me that in 30+ years I’m the only investor to ever call them and GIVE THEM deals.

17.)  Help find them cash buyers and investors.

Run an ad or put out signs for cash investors on a property the agent has or one just LIKE that one.  Offer to send them the investor leads to help them sell the house faster.  This also helps you build your OWN Fanbase as well.  The realtor may be (or say they are) “too swamped” to deal with the “work” but if nothing else you will help build the relationships.

You’ll be the ONLY person that has ever done this with them. 

18.)  Get the REO agent in your Fanbase.

You want the agents on your weekly email list so they build a relationship with you and also see how you move deals and build relations with investors.  I got my emails to go “viral” this way and have done deals with investors because their REO agent put them on to me.

19.)  The MOST important thing: just keep being helpful, make friends, keep in touch and HELP.

The Fanbase Formula is real simple:

First you make friends.

Second, you keep in touch your friends.

Third you find ways to help your friends.

That’s IT. 

That’s all you need to do to build every one of your companies.  That’s all you need to do and everything else will work out there is no way you will have a group of people who you stay in touch and help and you don’t end up making money in this business.

Some of you know about my successes and it is crazy because I can hardly believe how well this has worked out for me, I make more money than almost everybody I know that is trying to make money.

The secret is those three things…

… make friends, stay in touch your friends and find ways to HELP them.

Make the Universe Smile.

Oh, and the janitor story?
– This is one of our special needs parents and she was under my wing for about six months
– She followed the above steps for me and was helping and building the relationship with a few agents for MONTHS with no “money” just being helpful
– One night he got a call at 10:30 PM from the agent who said that the bank needed an offer by the end of the week no matter what HINT HINT
– The offer we made was less than HALF of their asking and it worked!
– Doing less than a week’s worth of work we sold it less than a few days they are getting almost 50k on the deal with good monthly payments as well

Thanks so much!  = )

Make the Universe Smile!

~ Indy Anna

Love (at) BigReia.com

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