HUD REOs and NPNs
Residential – Commercial – Industrial
Portfolio Price Range: 25-60 cents of Current Market Value

Overview
The U.S. government’s bailout of banks across the nation and the record numbers of foreclosures occurring each month across the country has created trillions of dollars of REO’s. The U.S. government is liquidating unprecedented volumes of U.S. REOs it has accumulated through HUD, Fannie Mae, Freddie Mac, the FDIC, and several National Banks. HUD is our direct source for REOs from all these government agencies. These REOs are comprised of residential, commercial properties and non-performing notes.

Our Non-Profit Agency has been certified through the U.S. Department of Treasury since 2004 and was authorized in 2009 to directly liquidate the HUD REOs into the private sector. This special appointment was given because of our work in Southwest Louisiana, specifically the Katrina Disaster area. In an effort to help us raise funds to invest into the Katrina Project, these government agencies are allowing us to sell these REOs at a fixed discounted price directly to investors. In turn, HUD requires us to reinvest 85 basis points from each sale into the Katrina Project for housing and other disaster relief needs.

The opportunity for buyers and/or investors to acquire these REOs and NPN portfolios at an unprecedented price point in U.S. history is what makes these REOs purchases especially attractive. These REOs are being liquidated at 25-60 cents on the dollar based on current market appraised value, property condition, and geographic location. For example, if a HUD REO home was appraised at $300,000 in 2007 and the current market appraised value is $200,000, and was sold in HUD REO portfolio for 45 cents on the dollar, this would mean an investor you would have paid only $90,000 for this home.

Below are a few of the investor requirements for purchasing these HUD REOs:
• ELIGIBLE BUYERS: Any private investor, investor group, or company from the U.S. or Foreign country. All purchases are in U.S. dollars.

• MINIMUM PURCHASE AMOUNT: $5 Million dollars. REO prices are fixed and there is no bidding. Will accept purchases over $1 Billion dollars. Buyer to provide soft Proof of Funds (POF) when making a request. Once funds are verified, the requested REO tape will be sent to the Buyer.

• REO TYPES AVAILABLE: Residential homes, Commercial Buildings, Retail properties, and Industrial properties. These properties are vacant and not listed in a MLS. You can customize your REO orders to what you are seeking to buy, such as: property condition (i.e. zero rehab, light rehab, distressed, or a combination thereof), geographically by state, county, zip code, or by price point like 40 cents on the dollar, etc. Prices vary by property types and geographic locations.

• DUE DILIGENCE PERIOD: 15 days because the properties are suspended exclusively for the buyer.

• TITLE TO PROPERTIES: All properties are clear titled showing HUD as the owner.

• 30-DAY ESCAPE CLAUSE: If you buy a portfolio from HUD, Fannie Mae, or Freddie Mac and there is a property in the portfolio that did not reasonably match the criteria you requested, then you have up to 30 days from the closing of your portfolio to notify the Seller and have that property replaced.

• ESCROW: You can set up escrow with a bank of your choice. Must be one of the 25 National banks or National Title / Escrow Company.

• REO PROPERTY VALUES: Properties have been HUD appraised within the last 90 days and represent current market values. The REO tapes will include property address and condition by category. If Buyer insists, they may receive a paragraph description of the property from the appraisal if available.

Hi rich98020,

I have been studying your post and I am interested in some aspects
of your offer. I tried to send you a Private Message, but discovered
I cannot PM because I don't have enough posts yet.
So, I'd better get crackin posting all over MMG
so I can have enough posts to be able to do PMs.
BTW, that is 25 posts (I just found out),
so you will not be able to do PMs either,
until you get 25 posts.

In the meantime, there is one question I guess I could ask you publicly
here in this thread. I wanted to know what is the amount of
earnest money needed for the Bulk REO purchases?

Our investor will provide us with 'Proof of Funds' for up to $50 Million,
so your minimum of $5 Million is no problem. But unlike our short-sale deals,
where we only need $10 for the option contract (in our program),
I am aware that most REOs require earnest money.
If that is also the case with your properties,
I would like to know how much is required?

Thanks.

JoAnn

Thanks Jo Ann,
We do not require any deposits of anykind or up front money at all. We will send your buyer the tape of properties, once we have the POF, LOI, NCND, etc, which I can send you.
If you can email me at rcrano@gmail.com from another email I will send it to you.

Rich

Hi Rich,

Thanks for your reply.

That is wonderful news. I will email you later. But just to let you know, I would be the buyer. I would probably bring in some silent partners, but I would be the one analyzing the tapes and actually buying the bulk REOs. I have to get my "End Buyers" (mostly other investors) lined up. I need to be able to flip the properties in a back to back closing. We have our own title companies for this.

Our mentor has advised us not to start off with REOs (bulk or otherwise) because of the earnest money that is usually required. But not having earnest money to worry about is good news for us all (our investor will fund 100% of the deal up to $50 Million). Still, we need to be prudent and have our buyers lined up (which is no problem for us because of the training we get). We know how to get the buyers. The other reason to have buyers lined up is because of the small due diligence window you give us (15 days).

What I like most about your offer is that we don't have to go through negotiations with "Loss Mitigators". I like the fact that the prices are fixed.

I plan to share your offers with our members. Our membership is large (comprising of many real estate investors) and can get you a lot of business...to help out your efforts with the Katrina Project.

There are many members in our program that can do these bulk REO deals right now, without having to assemble other partners or buyers (they already have their buyers lined up). I am a newbie, so I have some training to do. But because of the flood of REOs in the market, I know I have time. Hope you are a patient man... LOL

I can complete my training in less than two weeks. We already have all the documents for doing short sales, REOs and Bulk REOs in our back office. We even have complete auto-fill software that simplifies filling out our HUD-1.
Our mentor was told by the manager of our title company, that our members (in our program) are the best trained and get the most deals closed at closing (out of all the other investors out there that they deal with Nationwide). That's just to let you know I am going to be well trained and well prepared to purchase these bulk REOs when I'm ready.

Thanks again for your reply, and I will email you soon.

JoAnn

Sounds great JoAnn,
Please email me your contact info when you get a chance.
Thanks,
Rich

Hi Rich,

Did you get the last two emails I sent you? I was trying to let you know that the Capital Syndication webinar has been rescheduled to go Live tomorrow night. This is the source I told you about that can possibly fund our Billion Dollar plus Bulk REOs. It will be interesting to see how they answer the question I sent them about the Billion Plus Funding. A deal like this could help you out a lot with your Katrina Project, which I know is a very good cause. Those people in that disaster area still need a lot of help, even though they are not talking about it much in the news anymore.

Well, I hope you got my last two emails (if they did not get lost in cyberspace...LOL), and will respond ASAP.

JoAnn

Oops,

I forgot to say thanks. And thanks again for the email I got from you the other day.

JoAnn

Hi Rich,

Thanks for replying to my last email. You all will be happy to know that my emails did not get lost in cyberspace. Rich is just a very busy man, so if anyone wants to work with him, please be respectful of his time. If you have your buyers already lined up, or if you yourself are interested in buying his bulk REOs, be ready to do the paperwork now... before even contacting him. You will see what he needs from you in his previous post.

This can help him in his Katrina Project, so your investment with him can help a lot of people. Please see his email address in his post above.

Thanks.

JoAnn

Hi,

I am not looking for members for our program anymore,
which is why I removed my signature.
I may replace it with something else later.

JoAnn

Finally,

Some activity in this forum. I was beginning to think the real estate section was dead because I was the only one that seemed to be posting.

I have decided to reinstate my signature and keep my offer open. Even though the majority of my promotions will be outside of MMG, I never know when someone will stumble upon my offer.


Thanks

JoAnn

Rich,

My name is Jose Carreon. I have a few buyers that I represent that are looking for some REO Tapes, mainly in AZ. I also have about 7-10 buyers where I am direct to the buyers rep. I am in a crunch because I have been led down the path.... all I have gotten is a bunch of empty promises. I really need your help. If you have the where abouts to facilitate any orders please give me a call I would greatly appreciate it. Thanks

Jose Carreon
480-255-5157

Hi Jose,

I don't think Rich visits this thread much anymore, so you may have better luck emailing him. I am sorry to hear that you were given the run around with your previous dealings. This happens a lot when dealing with daisy chains. That is why many buyers do not want to get involved with daisy chains and hope their Mandate Agents can get very close to the seller. The same is true for sellers. They want to get as close to the real buyers as possible.

I know what can happen when too many people are in between the buyer and seller. Back in the early 1990s I was a Mandate Agent for a local crude oil and jet fuel buyer. I was not experienced at all, and in fact a rookie. But I had agents in the field teaching me the ropes. I had a knack back then for being able to FIND anything, and that was when we did not even have computers...we used the phone and fax machines.

I found people questioning if I was really a Mandate Agent for the buyer. So, I asked the buyer (the president of this oil corporation) to provide me with something that proves I represent them. So he called me into his office (which was just across town), and presented me with a document on their corporate letterhead which designated me as their Mandate Agent. And it said that I had the power to negotiate deals on their behalf. It was a beautiful document with the gold embossed corporate seal on it.

So then, when someone asked me for proof that I was the buyer's Mandate Agent, I just faxed them a copy my mandate. That document gave me a lot of power. In fact, I had one agent tell me that he had never been that close to a buyer's mandate before. That was a really crazy time because if I asked any of those agents to jump, they would say "how high?". But I did not abuse that power which is why they all respected me and liked me. Plus everyone loved how professional my "LOIs" were. I really paid attention to what I wrote, as opposed to most of the guys who just threw their LOIs together, and they were many times sloppy and incomplete.

But regardless of everything, there were always too many agents on the sellers side, and none of our deals would close. Something always went wrong, or not all of the agents could agree on things, and someone always got greedy. I did that for a year or so and got tired of that game. I made some great friends, but that does not pay the bills.

So Jose, you are in a good position if you are next to your buyers Mandate agent, but how sure are you they are the mandate? And what the sellers want is someone who can actually buy these properties, not someone who just says they can buy them... so are you sure they can "proof up"? Also, remember these REOs have to be bought in bulk with a minimum of $5 million. Are your buyers prepared to purchase no less than $5 Million? You must be as sure as you can be that everything is ok on your end.

Rich is not the buyer's mandate, but he is direct to the buyer's mandate, so that is pretty close too. He is a decent guy. Google him and you will find out about him. I did research on him which is how I found out his position. But next to the buyer's mandate is cool if you are a decent person, and not greedy. I won't get any further details on the mandate until I sign their NCND. I won't be ready for that until I am ready to deal.

I have not started my Bulk REO training yet, but once I do start, I will be the BUYER of these bulk REOs and I will have the "Proof of Funds". I will work only with someone next to the seller's mandate. No agents beyond that. That only complicates things and can be a real deal killer.

Well, good luck in catching up with Rich. Keep trying, he will get back to you. You may want to even call him. You'll find his number once you research him.

JoAnn

P.S. I didn't know how common my name was until I kept getting mix-ups on my credit report, and also when doing a search on my name online. There are many with my name, so I have many name sakes. Maybe if I get married I will have a less common name..LOL

Sorry,

I meant to say that Rich is next to the Seller's mandate, not the buyer's mandate. I guess I wasn't paying attention that time, or either I just had "buyer" on my brain...LOL

Anyway, no one expects posts in forums to be perfect. It's when you are dealing with real documentation that you'd better be darn near perfect.

Well, at least I caught the mistake. I'm still not sure how to edit posts, so I just put it here.

My apologies to Rich,

JoAnn

Possible Buyers for these Bulk REOs

Some buyers do not even want to deal with Mandate Agents representing them. Instead, some train "Partners" to go direct to the sellers, and let the partners share in the profits.

Even though I have not gone through the Bulk REO training yet to learn how to find the buyers of these bulk REOs, I do know of one that I can possibly flip a portfolio to. It is a well respected New York Hedge Fund. Hedge Funds, Pension Funds and other institutional buyers are some of the main ones who may be interested in buying these portfolios. But as indicated before, they may not look kindly on long lines of agents.

The particular Hedge Fund I am referring to that may be interested in purchasing a portfolio from me, is not currently advertising an interest in "Residential" Bulk REOs. They have in fact been given an additional 1.2 Billion to invest, and are looking to put this money into "Commercial" Bulk REOs. I know because I attended their one-two? hour long Webinar and took very detailed notes (as I always do).

They are training partners, and the training and support that they provide comes with a pretty hefty price tag. But it is worth it for the share of the profits they offer their partners. They train the partners to go directly to the sellers of the commercial bulk REOs.

My feeling is that I can flip the portfolio I can get from Rich to them because there is no need for these properties to be bidded on. The prices are fixed. So, I could find out the lowest price they will pay for bulk REOs, and flip it to them at that price, while still factoring in a nice little profit spread for myself. Their maximum is $40 Million for the residential I believe. I'm getting this off the top of my head, because I attended webinars for both their residential bulk REOs, and their new commercial bulk REO division. I do have the exact figure written down in my notes, stating whether that maximum was for the residential or commercial. I do know that the minimum is $2 Million.

So, if anyone is interested in these bulk REOs from Rich, but was wondering who in the world they could sell them to... these are some possible buyers. Of course you can be the investor and buy and hold them yourself (like many of these institutional buyers do), but you would have to have an awful lot of capital tied up until you can get them rented out, and/or sold. That is when you are going to need capital partners who can wait for however long they have to, to get their profits out of the deal. They would be in it for the long haul.

The investor in our program will only provide the funds for one day, so the buyer would have to already be in place with their funding or cash in hand, for the back-to-back closing. Our investor (also a hedge fund) will also pool their money with other hedge funds and capital sources, if need be, to fund larger deals (over $50 Million). But it would take much deeper pockets to fund a Billion Dollar+ deal. That's also where "Capital Syndications" come in. That's when you're really "playing with the Big Boys". If you're capable of taking "bold action", you can do that too. Just know that they only deal with experienced Real Estate Investors and Experienced Business Persons. You'll have to do a search if you want to find these capital syndications.

Still, to be taken seriously in any of this, you need the proper training in Bulk REO investing. You have to know what you're doing and you have to be able to speak the language. So, no matter where you get your training from, you must be serious about this business or don't even bother wasting your money. Even if you are doing this for short term profits, this is serious money we're talking about. Just one deal done right, can set you up for life. You can then quit after just one deal, or continue to do deals for many years to come. But you've got to crawl before you walk and the "crawling" is getting the proper training, and connect with real verifiable funding.

Well, that's just my 2 cents. Hope it helps and hope it motivates more people to invest with Rich..

JoAnn

Hi All,

I will be posting some info on how you can get access to the New York Hedge Fund
I talked about in the post above.

Be on the lookout for it, because my offer will be only for a limited time.

Thanks

JoAnn

Please contact me regarding HUD tape.

Hi JoAnn,

It looks as though you and Jose are the only remnents of the forum on real estate with regards to Bulk REOs. Sad commentary, but reflects the industry as a whole of brokers, mandates, intermediaries, or whatever they want to call themselves, as liars and cheats, never representing themselves as transparent. I really could not understand why they came down to lying on transactions they never knew about in the first place. They could never verify the portfolio they were selling, let alone run title verification to coincide with seller and title owner.
I have been in contact directly with FannieMae's director of REO dispursement and there is no such thing currently as an REO BULK Portfolio they are selling, or have sold in the past year, in fact they are chasing down these illegal entities selling these unlawful portfolios.
The success that I have had with Bulk REO Portfolios have always been on a local and regional level with the banks and title companies. As a realtor I have established a long relationship with banks on their REO assets from doing BPO's over a long period of time and gaining their confidence to list and sell their properties. Only after years of developing relationships have I gained the confidence of the local institutions to liquidate their REO assets with local investors here in Calif. I am content to selling $1MM - $3MM REO Portfolios every month knowing the product is real and I am getting it directly from my local institutions. Hard work, transparency, and a good knowledge of real estate will always win out.

Best,
Michael

Hi Michael,

Thank you very much for your comments.

Maybe you can write an ebook. I'm sure it would sell very well. Not that you would need the money, but it would give a very much needed eye opener to help people to understand what's really going on in the world of "Bulk REOs".

Our mentor in our program has warned us about fake Bulk REO portfolios, and recently announced that they will now only deal with experienced verified Bulk REO professionals.

Well, thanks again and I wish you much continued success.

JoAnn

Hello Michael,Joann: I am looking for reo bulk in California 1m to 5m.
Please call me 650-544-4250. Thank you.

Hi edwin1,

You did not say if you were a direct buyer or an agent. I have a feeling that Michael may not be interested in working with you unless you are the actual investor.

I cannot help you because I am not involved in bulk REOs anymore. I just found out last night on the Live webcast presented to us members by our mentor, that they are no longer endorsing or dealing with REOs. So that aspect of investing has been removed from our program. Probably because of some of the same shenanigans Michael talked about in his post above.

If you are an investor/direct buyer of REOs and you want someone to take you seriously, you need to provide more information than you did in your post above. Michael works with investors in California, so he would be a good match for you. You may need to prove to him that you personally have the funds to purchase bulk REOs.

Well, good luck in finding your portfolios.

Take care,

JoAnn

Hello Joann, I am an agent.

seems realesatate is in the boom again