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