Realistic Pricing for Bulk REO Investments

The cliché “This is a great time to buy” has taken on a new meaning for some investors. Purchasing REOs (also known as real estate owned, by a bank or lender as a result of foreclosure) is becoming very popular and lucrative business for investors. However, there is some confusion about the pricing of Bulk REO purchases.

Banks are receiving on average 85% of the list price (which is the market value established by the REALTOR listing the property) for an REO property selling on an individual basis. As a result, most of the leading banks don’t offer their REOs at bulk discount pricing.

On the other hand, banks that I work directly with are willing to offer REOs in Bulk (Four or more properties and a minimum purchase price of $500,000) at a rate of 70% of the list price.

The misunderstanding is that REOs sold in Bulk are selling for less than 70% of the list price. These deals are being advertised, but the there are no results. Investors are disappointed by misguided expectations for pricing of Bulk REOs. This process becomes agonizing as prices are promised, but the investors end up waiting and given multiple excuses as to why there are no properties. The investors eventually move on and expect the same pricing offered by those that didn’t have any access to REOs.

On a positive note, I have direct access to REOs throughout the United States owned by two of the leading banks in the world. If you are seeking to purchase REOs within a geographically specific area or a variety of states, I can facilitate the process. Basically, I put together an REO portfolio that meets your requirements and then you have an opportunity to select the properties that are of interest to you. After that, I present the offer to the bank and they will accept at 70% of the list price.

From my experience, the banks’ goal is to work with the buyer(s) and make this process as transparent as possible. They want the buyers to be satisfied as the banks have reputations to uphold. As a result, the banks provide an opportunity for due diligence to reassure the buyers and allow for the cancellation of the contract.

The profits are there to be realized and investors are receiving a 15% discount price on average per property by purchasing in Bulk. Again, the portfolios are direct from two of the leading banks in the world.

If you have any questions regarding the purchase of REOs in Bulk, please feel free to contact me at any time.

Thank You,
Imran Khan, CMO
Property Research and Resolutions
651-230-4889

Possibly related posts:

1. Nationwide REOs at Volume Discounts