It has been over two months since I have started making offers on properties in my hometown of Knoxville, TN.  I have not made as many offers as I would like but I have made enough to gather some very important information.

One thing I have noticed, something that really irks me, is that a lot of REO agents never change there listings from “Active” to “Pending” when they have an accepted contract.

I could understand if they want to continue to show the property but when you call they say “We have an accepted offer on the table” and imply that you should not waste your time to go in the house.  Sure a lot of pending properties fall through the cracks and can be hijacked by the experienced and sneaky investor.  But if you are going to tell me not to waste my time then you might as well list the property as pending.

The reason I am really irked about this is because of one property in particular.  It was the property that forced me to get a letter along with my proof of funds stating that business A (my money guy) agreed to loan my business the funds to buy a property.  We called the listing agent and she told of this along with the fact that they had already received an offer that day and that we needed to get our offer in by the close of business….which we DID NOT!

I could not get the paperwork together fast enough and thought…ok, lets move onto the next.

So a week or two has passed and I see the property still listed as active and I call up my realtor.

“Let’s go look at property A and B and submit an offer on the property we saw before.”

So my agent called the Realtor and she said to send the offer over…so we did.

A few hours later we get a call from the listing agents office and are told that the property is already pending with an accepted contract.

There are certainly some extenuating circumstances that played into this scenario but if the property was marked pending, like it should have bee, then my Realtor and I never would have wasted 45 minutes drawing up all the paperwork!

Just writing about this gets me worked up…..

Ross Treakle

I am out the door to grab a few drinks with friends before going to a birthday party for my Realtor!

Enjoy your New Years!

I have heard those words from my Realtor several times over the past few weeks as I have been submitting offers on bank owned properties.

“Ross, they are asking for highest and best.”

That is usually how our conversations start.  I will be the first to admit that it is getting a little frustrating and my wife is starting to pull her hair out as she exclaims “Are you ever going to get a property?”

I look at it a little differently and want to convey my thoughts because I think it is good news.

When I hear highest and best, I no longer think “well, I am most likely going to lose out on another.”

I think…”Everyone says the economy is terrible and that no one is making any money, you better tell that to the investors who keep buying all these properties!”

I do lose out because I am looking for the home run, I do not want a property with small margins…I want a property that has a guaranteed return!  That is why all of my highest and best offers have not been high enough.

When you get down and start asking yourself if anyone is making money in real estate, all you have to do is be making a few offers a week (which you should be doing) and you will quickly see that there are a lot of people out there making money in real estate.

These people are not the “guru’s” on the internet we always turn to for information, these folks are the real deal.  They are out in the real world making real offers and buying real property to fix and flip!

so the next time you hear your Realtor tell you “The bank has come back and is asking for highest and best”.  Don’t put your head down, smile and realize that you are taking action and that accepted offer will come shortly.  Just keep making offers!

I hope you have a great holiday and enjoy time with your family and friends!

Cheers,

Ross Treakle

I have made several offers over the past few weeks and the three Fannie Mae properties have all had different requirements!

The only similarity between any of them has been the requirement of a 10% EMD.

Property #1

Offer was submitted with all required Realtor forms along with Proof of Funds and EMD.

After offer submitted they came back and asked for highest and best because they had multiple offers on the property.  I lost out because I was not willing to go higher than my predetermined amount.

Property #2

Offer was submitted with all required Realtor forms along with Proof of Funds and EMD. In addition I had to sign the 15 pages of addendum’s provided by Fannie Mae.

I am still waiting to hear back on this offer.  I do not expect them to accept my offer, rather I think I will go into negotiation.  I have my predetermined offer and I am not willing to go any higher.

Property #3

Offer was submitted with all required Realtor forms along with Proof of Funds and EMD.  No addendums were required but the Realtor has requested that I have a letter from my lender saying they will provide the funds.

This is a little bit of a strange situation.  I am buying the property into my LLC and the funds are coming from a separate business.  They have said that my proof of funds must match up with the buying LLC.  OR…I can get a letter from the business who is holding the funds saying that they will provide $X amount of funds for the purchase of 123 Street.

I am noticing that there are a ton of hurdles to jump through when offering on a Fannie Mae property.  Some are easier than other and all of them may require something a little different.  I am not sure why this is but it is a good learning experience and all I can do is learn and continue to make offers.

I already have my eye on several other properties and plan on continuing to make offers until I can get a few under contract.

The last two are still up in the air and I will keep you posted.

The point of this post is to let you see some of the differences that you may encounter while dealing with Fannie Mae owned properties.

Good Luck and Happy Investing!

Ross Treakle

The past 7 days it seems like things have dragged out for one reason or another.  What is good about that is that I am starting to build momentum as I am approaching buying my first investment property in a few years.

My thoughts have shifted from doing one home at a time to doing multiple.  My brother, who has been an active real estate investor for many years is switching his focus off of short sales due to the recent legislation and he is going to be practicing the same investment strategy as I am.

He told me last night that his goal was to buy, fix, and flip 20 homes in 2010…I immediately responded that my goal is 21.  It is nice to have someone to push me and if you can find someone to push you than I think your chances of success increase.

Right now I can feel the momentum building as I have overcome some of the initial deal funding hurdles as well as contract issues (Fannie Mae) that had to be dealt with only once.  I can see that I am getting streamlined in my efforts to make offers.  I have properties lined up to go see and make offers on the minute I get word back on the properties I have already submitted offers on.

I am building momentum!

To start the ball rolling it did take me longer than I would like, but I have slowly picked up speed and things are starting to happen.  It took me years to find an investment strategy I was truly comfortable with, but now I have chosen and I have taken action.  I have followed the recommendations, making a few tweaks here and there to fit my personality.

I am working on getting the guys behind the course to let me offer it to anyone who wants to read and follow along with me as I take my journey.  The course is closed right now and it is rare that they take on new members these days.  But the course did click with me so I hope that it will click with you as well!

I am building momentum and I am going to be a successful real estate investor!

What is your path to success and are you building momentum?

Ross Treakle

I have a few updates and other things I would like to share…

Last week I told you that I was getting back into the real estate investing game full time.  This involves first screening properties and making offers.  Last week I was hoping to make two offers on bank owned properties but I was only able to make one.  I will tell you why in a second but first let me tell you about the offer I did make.

The property is a Fannie Mae owned home that is listed above what the home would be worth if it was completely fixed up.  I have noticed that a lot of bank owned properties in my area get listed purely based on comps as opposed to the actual condition of the property.  So our offer comes in significantly below asking but it is the price that makes since for an investment property.

As an investor it is important to note that you make your profit when you buy, it is when you sell that those profits are realized.  Buying at the right number is the #1 factor dictating your success.  If you buy too high, your profits will quickly go away.  In my area that means I am having to make a lot of offers, many of which will get rejected, but the goal is to land an accepted offer enough to have a successful and profitable real estate investment business.

I have not heard word back on this property, but if we go into negotiations I expect to get a 20 page set of addendum’s from Fannie Mae which will trump the initial contract I signed.  This is just one of the many guidelines that Fannie Mae has and there is nothing that an investor can do to avoid.

Why did I not make a second offer last week?  Because Fannie Mae requires that the first 15 days one of their properties is on the market that only home owners may make offers.  After day 15, then investors can step in and make offers.

Another Fannie Mae guideline is that your Earnest Money Deposit ( EMD), must be greater than or equal to 10% of your offer price.  So on a $50,000 offer your EMD must be $5,000 and on a $500,000 house your EMD must be $50,000!  This certainly helps to weed out the pretenders from the investors who actually have the cash lined up to make a real offer.

On the second property I plan on submitting my offer on Wednesday of this week.

In addition, I am going to give my Realtor a call after I post this to go look at three (3) other properties, all of which are priced a little closer to where my numbers need to come in and order them in priority.  My goal is to increase the number of offers I make each and every week until I land a deal or two…maybe even three.

You will never get a deal if you don’t first make an offer!

Cheers,

Ross Treakle

The audio is not the highest quality but I think you will still enjoy the “Tip from Andy”…and be sure to join Andy Heller and myself tomorrow night, Wednesday July 29th, at 900pm Eastern (6:00pm Pcific) by registering below!

https://www2.gotomeeting.com/register/156303699

Cheers,

~ Ross Treakle

I wrote yesterday about how hot of a topic REO’s are and how many of our contributors to the REI Concepts magazine have been raving about investing in REO”s and doing so for pennies on the dollar!  Well, I still have not told you anything about the REI Concepts Magazine.

The REI Concepts Magazine is my effort to reach out to the new investor and offer a new tool for getting the education needed to become successful in the business.  One thing that you will hear all successful investors say is that you always need to educate yourself.  Whether you are just getting started or an experienced investor, education is vital to your success.  It may be more vital to the new investor, but everyone has something to gain.

In my constant strive to reach out to the new real estate investor, I came up with the idea of creating an online magazine.  Thus the REI Concepts Magazine.  The magazine is compromised of audio transcriptions provided by our growing team of experts.  Each expert is asked to call in and record a 10-15 minute call each and every month about something going on in their business or any topic as long as it is educational to the real estate investor.

These are the same experts who I have teamed up with to create mini-sites that provide high quality information at an affordable price.  While I am a big believer in the big home study courses and attending live boot camps, there is a need in the market for affordable information.  And that is what I am striving to provide.

From this point forward, when you buy one of our cheapo training programs, you will be put into our REI Concepts membership!  The first issue, due out April 1st, will include 25+ pages of content.

A few of the article titles…

“The WOW Factor”

“Is Wholesaling Dead?”

“Get Paid When You Sell And When You Buy!”

“Investor vs. Retail Short Sale Investing”

That is just a few of the titles we will be presenting…let me tell you, I am super excited.  And as each month passes, we will be adding more content and more expert contributors.  We are even dangling the carrot in front of our experts to entice them to deliver the best content each month as the person who does will be rewarded.

To get your hands on our first issue, all you have to do is buy one of our cheapo products!

“Cover Your Ass Contract Clauses” class

“Learn to Lease Purchase” class (includes an REO class)

Cheers,

~ Ross Treakle

P.S. If you have already purchased one of the products and are still an active member, you will automatically receive the REI Concepts Magazine as a bonus.  If you are not an active member, rush on over to one of the sites and sign up today!

PLEASE NOTE: this is a digital product, you will not be mailed anything!!!

I recently had the privilege of interviewing a good friend of mine by the name of Andy Heller.  Andy and his partner are 20+ year veterans of buying REO properties and they currently utilize three different methods for finding and purchasing.  Those three methods are buying directly from banks, buying from REO agents, and buying at auction.

Let’s first define REO property.  An REO is a property which has completed the foreclosure process and the primary lender has taken back control of the property after the last effort by the lender to sell at auction on the courthouse steps.  REO properties become bad assets on the banks books thus limiting their lending power and thus their power to make money.  Banks are in the business of lending money, not owning ral estate.

When you are buying REO properties directly from the bank, you will want to focus your efforts on smaller local banks than the larger national banks.  The key to buying from local banks is knowing the exact property you are interested in before contacting the bank.  You can find this out by following a property you are interested in through the foreclosure process which culminates in the failed auction.  When the auction has been completed, wait a day or two and then call up the bank and ask to speak to the REO agent.  Have your property address in hand and reference the property when speaking to the bank representative.  When taking this approach to locating REO’s you can often catch the bank before they have time to recruit an agent to assist in the sale, thus eliminating competition and selling costs for the bank.

The second and the most popular method of buying REO properties is to work with a specific type of real estate agent called an REO agent.  An REO agent is a real estate agent who has developed a relationship with the banks.  The banks then send the agent their REO properties when they become available and ask that the agent assist in selling the properties for a commission.  once you find an REO agent, you must build the relationship.  You will end up making several offers before getting the attention of the REO agent.  The agent most likely already has a handful of investors they work with and it will take time to crack into that group.  When you are contacting the agent, ask them to draw up the contract for you so they will be paid as both the sellers and buyers agent, thus doubling their commission.  Once you have the relationship, you also want to be sure to close on the properties you make offers on.  If you fail to close, you may alienate the agent and they may never choose to work with you again in the future.

The last method of buying REO properties that Andy Heller and his partner are currently using are auctions.  I am not talking about the courthouse auction, I am talking about an auction held by an official auction house.  WARNING: I would stay away from this method of you are just getting started.  In fact, I am not going to go into any detail on this technique.  If you are an active and seasoned investor, you are most likely already aware of this method.

These are the three methods that Andy and his partner use to buy REO properties at pennies on the dollar.  I recently made a class with Andy called the “Become an REO Expert” class which you can get your hands on for under $25!  You also get the “Learn to Lease Purchase” class and an interview with a real REO expert!

>>Become An REO Expert<<

Cheers,

~ Ross Treakle

This is the third installment of “The Foreclosure Process”.  We have already covered Pre-Foreclosure and Foreclosure, today we will cover Post-Foreclosure.

The term Post-Foreclosure is not something that you often hear real estate investors talking about.  You are more likely to hear the term REO or Real Estate Owned.  This refers to bank owned properties that have completed the foreclosure process which culminated in a failed courthouse step auction.

At courthouse step auctions, it is a fact that a majority of properties are not sold.  Sure a few properties are moved but the cash requirements and sheer volume of properties means that a majority of the homes at auction will be taken back by the lender.

Once the property is taken back by the lender, the property becomes a Post-Foreclosure which I will refer to from this point on as an REO.

There are a few ways to buy REO properties, I will cover two methods which make up probably 99% of REO properties sold.

The first method is to buy directly from the lender.  A quick note of caution…DO NOT try to buy directly from a national lender!  This method only works when buying from local banks.  If you tried to contact a national bank, you would probably never get in touch with the right person and your efforts will go unrewarded.  Conversely, if you know the right things to say when contacting a local bank, you may be able to purchase the REO directly from the lender.

When calling on your local bank you will want to know the exact property you are calling about.  If you just call and do not know any specifics, you will most likely never get past the gatekeeper.  You can find out the property details by following the property though the foreclosure process which again culminates in a failed auction and subscribing to any number of foreclosure listing services.

One thing to note about contacting the local lenders…if you contact them the day after the failed auction, you may be able to catch them before they even officially have the property in their computers as an REO.  This means that you will catch them before they have begun marketing the property or listed the property on the MLS.  This is huge because if the bank is motivated, you may be able to negotiate a bigger discount when buying because they have not had any of the expenses associated with selling the property on their own.

The second method to buying REO’s is to find, meet and network with your local REO Agent’s.  There are a handful of Realtors who focus on bank owned properties, I call them REO Agent’s.  These agents are very unique in the fact that they have taken the time to contact the national lenders.  They have built relationships and now those lenders in turn pass on their own REO properties to those agents.

When you are contacting the local banks, you might come across a bank that says that they only sell their REO properties through a real estate agent.  That person is an REO Agent and may very likely have REO properties from several lenders.  Over time you will learn who the REO agents are in your area and you will be able to go back to them over and over and over again.

That is one of the best things about investing in REO’s.  Once you have a relationship with a few REO Agents, you will be able to get deal after deal after deal.  The most important thing that you can do to grow a profitable relationship is to be able to actually close on the properties you attempt to buy.  If you say you are going to buy a property and then back down because you do not have the financing, you might have just blown your one chance to build a quality relation with your local REO Agent.

I hope this has given you a little insight into the world of the Post-Foreclosure.  I have created a very cheap and affordable recording called “Become an REO Expert”.  The website to advertise that program is not yet finished but you can get the REO program along with my “Learn To Lease Purchase” class by clicking the link below.

Here Is The Link

Cheers,

Ross Treakle