“Money isn't the most important thing in life, but it's reasonably close to oxygen on the ‘gotta have it scale'.”
I agree! But it doesn't just fall in your lap. When you're working in the real estate investment industry selling Bulk REO's, you need to map out your method of operation to maximize your profitability. You may be wondering how you can profit from Bulk REO's, since everyone, from the buyer and the seller, and in between, is trying to get a steep discount. I'm going to tell you how.
3 Ways to Profit With Bulk REO's
My first profit driven idea is to act as the broker aka middleman between the buyer and the seller. This may be the easiest and most profitable method available. No cash or credit is needed to broker deals and it's based on the relationships you have established with key players in the Bulk REO niche market. As a broker, you can choose to represent either the buyer or the seller and charge a fee. It's even more profitable if you represent both of them at the same time! This can net you thousands of dollars. This is also known as “wholesaling” bulk reo properties.
My second money-maker is giving your buyer (Private Equity Fund, Hedge Fund, high net worth investors, etc.) the opportunity to “cherry pick” homes from your Bulk REO package, also called “Bulk REO Tape”. For example, if I send you over a package of 100 homes, there may be six houses in one given market an investor may want to buy, versus the entire package. Let's say I sell you those six homes at $10,000 a piece, but you sell those same six homes to a local investor for $15,000 a piece. You made yourself between $30,000 just from one transaction.
Buying From Banks
Third, you can buy directly from the bank if you have cash. This is where the greatest discount is available and where the highest profit margin can be earned. The banks are desperately trying to get rid of the surplus of distressed properties on their books and will sell at .25-.60 on the dollar. (****did I say that right? – Sure Did!)
These are the main money making possibilities when you're a Bulk REO Investor. This business is about who you know. Don't be afraid to make cold calls, attend networking events, pass-out flyers, and any other form of marketing to make new contacts. Use the law of supply and demand to your advantage- where you have access to the coveted supply of Bulk REO's, and YOU are in high demand for access to them.