Foreclosures bank owned properties are back. The pandemic is wrapping up (hopefully), and mortgage deferments are about to end. It's the calm before the storm. Prepare your company to respond to the market by adding foreclosure and bank owned property strategies to your marketing plan.
Yes, the 2021 foreclosure bank owned wave is here and the fun has started. Don't be late to the party. ATTOM's Foreclosure Market Report May 2021 found one in every 12,700 housing units nationwide had a foreclosure filing.
JULY 2021 American Enterprise Institute Housing Center alerted us that these 10 cities are experiencing foreclosures. They based their numbers on the amount of mortgage default notices, bank foreclosures, rental and home owner vacancy rates and scheduled auctions.
These are the areas for opportunity.
overview: Total US
Riverside, California (San Bernardino, Ontario) Total of delinquent loans: 14.3 %
Fort Worth, Texas (Arlington, Grapevine) Total of delinquent loans: 15.7 %
San Antonio, Texas (New Braunfels) Total of delinquent loans: 16.0 %
Atlanta, Georgia (Sandy Springs, Alpharetta) Total of delinquent loans: 17.2 %
Baltimore, Maryland (Columbia, Towson) Total of delinquent loans: 17.3 %
Houston, Texas (The Woodlands, Sugar Land) Total of delinquent loans: 17.4 %
Philadelphia, Pennsylvania Total of delinquent loans: 17.5 %
Chicago, Illinois (Naperville, Evanston) Total of delinquent loans: 18.8 %
Washington, D.C. (Arlington, Alexandria) Total of delinquent loans: 18.8 %
Dallas, Texas (Plano, Irving) Total of delinquent loans: 19.1 %
We're beating the banks, and you can too. Banks are highly motivated sellers and are only interested in the bottom line. Banks are not in the real estate business they're in the money business. It's all about how fast they can move their inventory.
Banks are not emotional. Distressed homeowners who are in foreclosure are though and need to be handled delicately. Which can be very time-consuming and exhausting. Instead, dealing with the banks is an easy solution. The bank owned foreclosure properties have already gone through the complete foreclosure process and almost all of their properties will have clear titles and vacant.
Most bank owned properties need repairs and the best deals are on the ones with the problems. So make certain to complete all due diligence during the inspection period, usually between 3 and 5 days.
Conduct all inspections for termites, insurance, appraisals, and repairs. Watch out for missed code enforcement and utility bill liens. Do not miss inspection deadlines. Banks do not like to hear excuses. Instead, they'll take the deal away from you and give it to another investor.
Banks don't like to pay closing costs. Don't take shortcuts when closing a foreclosure bank owned property always insist on Title insurance even if you have to pay for it yourself. It's one of the cheapest forms of asset protection, and it gives peace of mind. Because of issues like undiscovered judgments and liens, Robo signing, and mistakes in the documentation, the property's title could be clouded, which would create uncertainty about the buyer's rights of ownership. As long as the new owner (you) has title insurance, former owners can't seize the property back.
Buy in as-is-condition
Buy with cash or hard money
Close quickly (5-10 days)
Buy without contingencies
Escrow a large deposit (10%)
MLS. Multiple Listing Service (MLS). REO Realtors will have access and send reports straight to your inbox.
Online platforms. Search the platforms like Zillow, Trulia, Redfin, and Realtor.com. (to name the big ones). But it's time-consuming and most of the foreclosure bank owner properties are listed with a Realtor. It's easier to let a REO realtor compile the list and send the properties to you.
Fee-based online sites. Investors can find pre and foreclosure bank owned properties as soon as they come on the market. Get instant access and search by cities and zip codes. Cost-effective and saves time.
County public records and legal newspapers. Too much work.
Auction companies. Online auctions are convenient place to find foreclosures bank owned properties—register, search, due diligence, bid, and close. However, check for processing fees and other buyer costs.
With software or online foreclosure platforms that automatically generate leads in your target area.
The best way to contact the owner(s) is by calling and direct mail. A skip trace service is important because sometimes these homeowners have already vacated the premises and did not leave a forwarding address. We like Realeflow because of its full-service real estate business software with direct mail and skip trace service and 20+ other tools.
Foreclosures bank owned real estate and REOs are profitable investing strategies which can produce a solid income stream for your business. The current foreclosure bank owned real estate market is about to offer smart investors opportunities to quickly snatch up properties. But How?
Sweet and simple.
Now, that may not be the way you take your coffee, but that is exactly how your foreclosures and bank owned real estate transactions take place. The secret ingredient that makes this strategy sweet and simple is the REO realtor.
When buying foreclosures bank-owned real estate, the REO realtor is a money-making machine, provide them with your buying criteria, motivate and set them on fire, I mean automatic, and let them do what they do best; find and close deals.
Plus, the bank pays their commission.
Besides new and pocket listings, have your REO Realtor also send you a list from the MLS of foreclosures bank owned properties that have been on the market for over 90 days.
All won't be great deals because of the number of problems and repairs, but some will produce a kickin' profit margin.
Reo realtors have an "in" with the bank.
The REO Realtor will also have continuous listings from these same
banks in the future, so once you have established yourself as a powerful
real estate investor, you'll get the heads up on all foreclosures bank
owned properties before they officially hit the market.
The REO realtor does all the work, tying up all the loose ends, and brings the bank, the investor, the title company, and the real estate deal together for a successful close.
Pro tip: Right before the Bank's end-of-month evaluations is the best time to submit your low-ball offers. Along with the end of the fiscal year and before major holidays.
Yes and from government agencies. Fannie Mae, the Federal Housing Administration, Treasury Department, and Small Business Administration all sell foreclosures. However, most investors avoid these government agencies because of the restrictions and purchase procedures.
Bank websites. All the banks, both national, local, and credit unions, have foreclosure listings on their website. However, it is time consuming to sift through and visit multiple websites. In some smaller cities a local bank can be an untapped source for foreclosures bank owned properties, provided that they hold their own mortgages and not sell them off.
It's easily accomplished by being prepared with the proper documents and have hard money lined up and ready to go.
So, can you show funds? It's best to have a pre approval letter for funding from your lender. A copy will need to be submitted along with the contract. Always use the same name on the pre approval when you write the contract.
Look like a professional and submit a cash contract, with "proof of funds," a large deposit (10%), and 7-10 days until closing. Remember that the Bank can slow down the closing without any consequence, but you, the buyer, cannot.
Pro tip: Realtors, banks, and mortgage companies use non-assignable contracts. Sometimes this can be an obstacle for investors who are flipping or wholesaling foreclosures bank owned properties. Here are 4 legal maneuvers to work around non assignable contracts.
Since, foreclosures bank-owned real estate can be bought as single properties or in bulk REO packages, it's the easiest, fastest and most convenient way to purchase and build a portfolio overnight.