Problem is, many REO investors don’t think like banks. They believe their offer is fair, the property has languished on the market forever, and they can’t understand why the bank isn’t returning their calls.

All of this may all be true, but remember it’s the bank that holds the key to REOs; the buck starts and stops with them. Without accepting your offer, you don’t have a deal. A little homework before you make an REO offer can lead to a lot less headache in the long run.

Your goal is to get the bank to say “yes” to your offer. The more you know about the factors a lender uses to evaluate a REO properties can result in a smoother sales process and, ultimately, bank approval of your offer.

Evaluate Your REO Deals Like A Bank

No matter how much your offer is, the bank is going to always think the property is worth more. It’s that simple. Lenders agree to an REO based on a percentage of what banks believe is the “as is” value of the property. Every lender has a different approval percentage, and these figures can change.

Your goal is to offer just enough so that the lender quickly approves your offer; nothing more and nothing less. Knowing the approval percentage is half the battle; the other part involves the as is property value in the lender’s eyes.

This is determined by the broker’s price opinion (BPO), which involves three comparable sales, three active listings, local market conditions and other evaluations. The BPO is typically conducted by a real estate agent and also includes an interior and exterior “drive by.”  Many lenders also use appraisals.

Bank Evaluations Are Also Important In REOs

The bank doesn’t just rely on outside evaluations; internal evaluations from their REO or special assets department also weight heavily in the decision making. The valuation department can assess a property’s worth, as well as use tools that real estate professionals use.

Finally, the lender uses the BPO, appraisals and internal evaluations to determine the property value and base their decision on a percentage of that number. Sometimes, the bank’s loss mitigation rep will tell you the number.

By thinking like a bank, you can offer enough so that the bank says “yes” to your offer.

Post from: Nate Kennedy's Money Blog

Think Like A Bank To Get Your REO Offer Approved

Many novice real estate investors believe they have to own properties to be successful, but you can become just as successful with wholesaling – and you’ll never have to own a single property!

This makes wholesaling one of my most popular avenues for real estate investors. When you wholesale, you don’t take ownership of property. No title or deed ever changes hands.

Wholesaling depends on three things:

1. Getting a property under contract.
2. Assigning the contract to another buyer.
3. The buyer closing on the property – and you collecting your check.

It’s really that simple. There are no banks involved and no offers that involve months of waiting to approve. There is very little risk and you can become a wholesale investor with little or no money. Best of all: You can make money on property you don’t own.

Let’s take a look at three steps crucial to wholesaling.

Step one: Find a property

Finding a property is the key to successful wholesaling. Your property must have sufficient equity in order for you to make a profit. Your property must have enough equity or profit margin for you as well as the buyer to make a profit.

Step two: Start building your buyers list.

Rehabbers are your best friend. Run a newspaper or online ad or place bandit signs with the following info:

• Handyman’s Special!
  Great deal for rehabbers!
  Call 555-555-5555 today.
  OR
• Investor special!
  Thousands below market value. This deal won’t last! Call 444-4444!

Your phone will soon begin to ring. When it does, get investors’ names, numbers, email and other information and put it in a database. This is valuable information, because this is your list of potential buyers. Run your ads for the next three months – even if your properties sell.

Your goal is to collect as many names and contact info as possible. The key to wholesaling is finding a buyer. The quicker you find a buyer, the quicker you get paid.

Step three: Negotiate a deal with a rehabber

You’re deal has to include enough cushion for you and the rehabber to make money. If it doesn’t the deal just won’t work.

Let’s say a house is worth $100,000 in good condition. The homeowners are in foreclosure and have to move quickly. They owe $50,000 on the property but need $5,000 to move and pay for a deposit at another home. You offer $55,000, but the house is worth $100,000 in good condition, not counting about $15,000 in repairs that need to be made.

You have a rehabber and you agree to sell it for $65,000, with $10,000 as your fee. The rehabber will fix up the property and sell it for market value and make a potential profit of $15,000 to $20,000. It’s a win-win for everyone, the foreclosed homeowner, you as the assigner and the rehabber.

Step four: Get Ready To Close On Your Wholesale Deal

The best part with wholesaling is that you never have to own anything; you just find the people to make the deal work – the motivated homeowner and rehabber – and go to closing. It’s that simple, and everyone wins with wholesaling.

Post from: Nate Kennedy's Money Blog

You Don’t Have To Own Properties To Be Successful in Wholesaling

Once uncommon, real estate short sales are now the norm.

The plummeting housing market in the United States, combined with record numbers of foreclosures, has caused an explosion in the number of short sales or pre-foreclosure sales. These sales occur when the homeowner and the mortgage lender agree to sell a home for less than what is owed to another buyer.

And they’re ripe opportunities for investors to buy homes and properties at below-market values.

The Benefits of Short Sales

Pre-foreclosure sales offer benefits to buyers, sellers and investors: The new buyer buys the home for the “short” amount with built-in equity and at a much cheaper price. The previous owner avoids foreclosure, saves their credit rating, and is generally able to buy a home again after a few years. The short sale investor gets the investment property at below market value pricing.

The Short Sales Market

With millions of foreclosed properties dragging down their balance sheets – and forcing some banks to close their doors – short sales are driving the troubled housing market.

These sales are popular for one primary reason: One in every 136 homes in the United States is in foreclosure, according to recent figures from RealtyTrac Inc.

Many of those homes are potential candidates for short sales. And,  as job losses mount, even more homes may be sold this way – and serve as a boon to real estate investors who want to buy homes with instant equity at low prices.

Banks In The Short Sale Business

So many homes are in pre-foreclosure or foreclosure that banks have set up departments to handle the overflow. The bank isn’t in the business of holding or maintaining foreclosed homes; it costs time and money to maintain a home in default. The bank loses money when the property is in foreclosure because no one pays the mortgage.

So, selling the property at a lower price is often the best option for the bank compared to not generating any income at all.
Here’s where short sale investors come in. Most banks have a process for short sales. With a bit of patience – it takes anywhere from three to nine months to get your deal approved — you can get investment properties at great prices.

The process can be cumbersome so it’s best to use an experienced short sale agent or negotiator. It can take months for the bank to accept your short sale offer, but the benefits may very well be worth the wait.

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Post from: Nate Kennedy's Money Blog

How About Them Short Sales?

If you’re looking to unload properties when the market hits a snag, lease options are one of the industry’s best-kept secrets.

A lease option is an agreement between a buyer and seller that gives the buyer the option to buy a house at the end of the agreement. The seller must sell the property if the buyer decides to exercise the option to buy it. The seller also agrees that they will not sell the property to anyone else before the option expires.

The buyer is the lessee (the person who leases the home) and the homeowner. At the end of the lease, the lessee has the option to purchase the home. This method of buying homes has become more popular as the real estate market has slowed to a crawl.

Lease Options Offer Options For Real Estate Investors

Lease options offer opportunities in up and down markets.

As an investor, you stand to gain, especially if the lessee decides to purchase the property at a higher cost than what you could receive on the market for it at the end of the option.

What’s so unique about lease options is that most of them – 95 percent – aren’t exercised. This means plenty of opportunities for sellers. In exchange for a lease option, sellers often require a down payment and monthly rent payments are generally higher.

Typically, the option is within two or three years or enough time for the buyers to qualify for financing. Lease options are commonly used options for people who want to own a home, but don’t qualify.

If the seller doesn’t exercise the option to buy, they don’t get a refund on their downpayment. That income goes to the property owner. The downpayment is typically 3 to 5 percent of the set purchase price, although prices can vary.

Leasing Options Offer Benefits To Investors, Buyers

There are benefits for both buyers and sellers: The buyer gets a house at a pre-determined price. The seller gets more income from the buyer and a better quality tenant who is usually committed to taking good care of the property.

Many buyers resort to lease options when they can’t sell their homes using traditional real estate methods. Lease options allow the homeowners to keep income coming in from rent as well as tax advantages.

If you would like to learn more about lease options then you can download a FREE eBook by going here…

CLICK HERE TO GET A FREE BOOK

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Lease Option Investing – Good or Bad?

Many novice wholesale investors think you need lots of money or excellent credit to succeed. Or, they think there are complicated classes or licensing.

I’m going to show you how anyone can get started as a wholesale investor – even someone with absolutely no experience.

Wholesaling Explained

Usually, there’s a lot of mystery about wholesaling. But it’s pretty easy when you think of it in these terms: You are the middleman. It’s your job to find a seller, put the house under contract and assign a contract to a buyer – nothing else.

You don’t have to put any money down, hire an attorney, conduct a closing or anything else that is involved with traditional real estate. You collect a check for setting the deal up.

Wholesale Investors Depend On Motivated Sellers

The difference between success and failure in this business boils down to one thing: motivated sellers.

It’s your job to find motivated sellers, folks who unfortunately find themselves in foreclosure or who have to sell their homes quickly. Motivated sellers are a literal goldmine.

These days, there is an almost endless supply of motivated sellers.

The battered housing market – the glut of unsold homes, record low housing prices and epidemic levels of foreclosures — is a wholesale investors’ best friend.

Finding Buyers

You’ve found motivated sellers. Now all you have to do is find buyers. But you aren’t just looking for any buyer; you’re looking for cash investors. This is where your fee comes in. You are paid a finder’s fee by the buyer to find the deal.

You’re the broker, and it’s a win-win for everyone involved. Desperate sellers have a buyer for their home and investors save time, money and hassle finding deals on their own. You’re literally handing investors deals.

There are plenty of these types of investors looking for deals. Usually, they’re the folks you see advertising “We Buy Homes.” Or, you can attend local real estate investment meetings to find buyers who are looking for deals.

Now, get the house under contract for a price that allows you and the investor to make money.

Here’s the process:

1. Find a motivated seller
2. Agree on a price that lets you sell the house quickly and make a profit.
3. Get the house under contract.
4. Put a clause in the contract that allows you to assign the contract.
5. Find a cash buyer.
6. Make sure the buyer closes.
7. Cash your check.

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Wholesaling Your Way To Riches

But can you?

For sure, real estate investors can benefit from the glut of REO properties now on the market. These properties are foreclosures that go back to the mortgage company when they aren’t sold at auction.

They end up at the bank, waiting for investors like you.

REOs For Sale

These deals offer plenty of potential for savvy real estate investors. Buying REOs is a smart strategy for seasoned investors. With so many homes in foreclosure – an estimated one in five homeowners owe more on their homes than what they’re worth – real estate owned properties are just one way that successful real estate investors can cash in on bargains.

Generally, most foreclosed homes aren’t sold at auction because the bank is owed more than what the property is worth. It goes back to the bank and becomes an REO property.

Now what? The mortgage loan is erased. The bank may handle the eviction, do some repairs and negotiate with the IRS for tax liens. Now, here is where you as an investor come in.

What To Look For In Bank REOs

Not every real estate owned property is a great deal.

· Make sure your offer is comparable to prices of other nearby homes.

· Factor in the costs of renovations.

· Keep your eye on market value and don’t feel pressured to pay more.

You should do the same due diligence on bank-owned properties as you would any property that you buy.

Each bank may have a different process for selling homes, however, they’re all concerned about the bottom line. Banks aren’t in the home business, but they have dedicated departments that do nothing but sell and manage this type of inventory.

Making An Offer

The bank will sell the home “as-is” without any warranty. Before you make an offer, make sure you find out the following details:

· Are there inspection reports you need to see?

· Find out what work, if any, the bank has agreed to perform.

· Find out how long it takes for the bank to accept the offer.

· Find out how your agent must deliver the offer.

Once you make an offer, be prepared for the bank to counter offer. This is normal, and you should plan for this.

Make sure that your offer includes an inspection period that allows you to end the sale if there are damages that you didn’t anticipate. Your offer should be easy to accept and should include a pre-approval letter for your REO home.

Post from: Nate Kennedy's Money Blog

Can You Buy REO Homes For Pennies On The Dollar?

This is exactly where I was when I experienced my financial tri-fecta – foreclosure(s), repossession, and bankruptcy.

I just put together a video that outlines how I handled this and how I turned it into a Million Dollar Experience.

CLICK HERE TO JOIN ME

Post from: Nate Kennedy's Money Blog

I Was Broke And Hated It

Before you read any further, I want you to think about this for a minute.

==>What is Real Estate?

==>How can it benefit you?

==>What does it mean to you?

Go ahead and WRITE DOWN your thoughts as this is the first step to starting a successful Real Estate Investing Business. There are no right or wrong answers here, just the understanding of what you really want out of this career path.

Alright, good.

So what did you come up with?

For starters, when people think of Real Estate, they think about buying property one day and selling it for a profit….the next day or so.

Yes, Real Estate Investing can be done this way and I will show you how, but there is more to it. It takes planning, dedication, and the desire to succeed!

Real Estate is a long-term investment, things don’t just happen overnight.

Ask anyone who became wealthy with Real Estate and they will tell you the same thing…they were in it for the long haul and they were in it for a REASON…

What’s your reason?

• To become financially secure
• To be independent
• To have enough money to send your kids to college
• To live the lifestyle that you dream of

All of these and more are good reasons, but, just like everything else in life, you get what
you put in.  So I’m going to explain how to get started and how you can get the MOST out of YOUR investment.

First of all, there are some things to consider when investing in Real Estate, especially residential Real Estate.

If this is your first time thinking about investing in Real Estate, then you probably already know that many people are buying and selling property for HUGE PROFITS and you know you can do the same.

Most people look at 2 Options when they get started – You can get started by taking on a loan to fix and flip/hold or you can look at simply controlling the property with a contract and then wholesaling it right away for FAST CASH!

The second option is always the best and fastest, because it requires absolutely no credit, no income, and no assets…
Why?

Because YOU can started right away without waiting. It let’s you build your wealth a lot quicker and avoid a delay in your Financial Freedom!

If you decide to control and hold — keep in mind that you will still need to have a little extra cash to pay for repairs, maintenance, miscellaneous items, and taxes.

This is why you will still want to learn the Art of Wholesaling – It is the Cash Flow that keeps you building your Long-Term Wealth!
Be diligent and resourceful, after all you are making an investment for your future so make sure you don’t make the wrong decisions that cost you money instead of making you money.

So with that said – What way are you going to go?

I say get started today, especially knowing that more Millionaires have been created through real estate investing then any other business.

Prepare yourself and you will be the next Real Estate Millionaire!

Failing to plan is planning to fail. So make sure you  have a PLAN.

I’ll talk to you again soon.

Your Friend,

Nate Kennedy

PS. If you’re looking for the best way to setup your Real Estate Investing Business then I recommend going to this site and getting the this course… http://www.closeyourfirstdeal.com/

Post from: Nate Kennedy's Money Blog

Is Real Estate Investing For You?

Did you do it?

If you did then congratulations to you as you are on your way to being a true Star!

If you did not then I suggest you do it now. If you don’t do it then just settle on in to a life of boring complacency that will keep you Just Over Broke (JOB).

You make the call…if you do it then make sure you read on…

Now that you have defined your business you need to begin an action plan that is going to keep you on the right track of Movie Star Status as a Real Estate Investor.

Here is what you need to do next…

Step 1. Develop a list of all Team Members.  If you don’t have a Team Member for a specific task then do a research in your local market to find out who is the Big Dog.

Step 2. Decide what each team member’s function is within your business

Step 3. Begin to reach out to all potential Team Members. You will want to explain to them exactly how your business operates and how you see them fitting into the fold.

Step 4. Now, keep a list of all Team Members Name, Phone Number, Email, Address, and any other important information.

Step 5. Put them all to work!

I can’t stress enough how important it is to know your business and know the roles of all your team members.

If you don’t know the stuff above then you are fooling yourself and others in believing that you will be a STAR.

What are you waiting for? Go get started!

Your REI Consultant,

Nate Kennedy MD

Ps. Do you want a book a free book that gives you a great outline of all your team members?

If you do then get over to:  http://www.closeyourfirstdeal.com/

Post from: Nate Kennedy's Money Blog

Get Your Team On Your Page

You are not alone over 98.6% of people who try to succeed as an investor do not do it and it breaks down to one simple challenge.

Analysis Paralysis with no clear business plan to make a real living as a “True” real estate investor.

I talk to people all the time that are on information over load and it causes them to shutdown and in turn fail in this great business.

If I could make a recommendation to stop the madness I would say pick a niche and run with it.

This niche does not have to be the sexiest one out there…it just needs to fit the lifestyle that you choose.

Here is my niche and what I do…

“I am a real estate investor that buys and sells bank owned homes by utilizing private lending and alternate financing methods.”

Stick to your bread and butter…do not try and be a jack of all trades….it causes failure.

So, I ask you….better yet I double dog dare you…

To develop your very own targeted investing strategy and then begin to develop a detail planned on how to achieve success with it.

Don’t worry I will be giving you some insight, tools, and tips to help you achieve star status as a real estate investor tomorrow.

Keep a lookout for it in your inbox or you can always check back anytime you want at www.NateKennedy.com

Your friend

Nate Kennedy

PS. By the way, I have a training course you can try right here: http://www.closeyourfirstdeal.com/

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Stop Struggling and Get on the Right Track