what are reos? reo stands for “real estate owned.” bank owned properties. clean title and clear...

What are REOs?

REO stands for “Real Estate Owned.”

Bank owned properties. Clean title and clear of any liens.

Time is of the essence. Window opportunity 18-24 months.

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Bank•Reduce inventory / less reserve

pressure•Wholesale only

Portfolio Buyer•Help stabilize market•Help rebuild affected communities

End Buyer•Buy at discounted price•More affordable for first time

buyers•Good investment opportunity

Win-Win

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•Buy low, direct from clearing house

•30%-80% discount

Purchase

•Use local teams

Operation

•Turnkey solution

Exit strategy

Strategy

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•Cash

Direct Sale

•Create notes

•Sell notes for cash

Seller Financing

REO Exit Strategy

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California vs. Out-of-StateCalifornia Out-of-State

Purchase discount 30-40% 50-80%

Logistic Within distance Requires local teams

Cash sale No Yes

Seller financing Yes Yes*

* Monthly payment is lower than local market rent.

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Process and timelineEstablish LLC – Investment vehicle (2 weeks)

Capital injection

Purchase portfolio (2 weeks)

Exit strategy (3-5 months)

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Using IRA FundsOpen a Self–Direct IRA account with American

Pension or other passive custodian companies.

•IRA is an effective investment vehicle, can be used for various asset classes, including real estate.

From American Pension a/c, invest through LLC.

Return of investment goes back into American Pension

a/c.6/14/2009

Real Case Example

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REO Pictures

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REO Pictures

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