What is the Key to Buying Distressed Asset?

We are actively buying distressed assets (mainly residential REO's, Short Sales, etc) in Los Angeles County.  As you all know, it seems that new cash buyers are popping up left and right and claiming they can close fast with no contingencies.  This has made it extremely difficult for real buyers to get offers in the door and accepted by sellers.  

We are consistently seeing properties hit the market with an on-slaught of offers.  At times, we have been competing against 30 different buyers.  What we are seeing is that the majority of buyers are falling through and canceling or not performing, which then leads us to have to resubmit our offer and go through the process again and again.  

So my question is, what are the best ways to get an offer/buyer noticed from the beginning in order to avoid competing with so many non performing buyers? 


Josh McIntire
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 17 2010 - Los Angeles
We think we've answered this question for you!
 
 

Replies (17)

Well Joshua.  There is currently a 98 per cent chance that any REO, short sale, foreclosure property being sold is done illegally as there are phony lenders involved and the legal lender cannot even be determined.  That means you are an accessory to fraud and it is a felony.  The only way to preclude yourself and those you choose to involve is to conduct a complete forensic and securitization audit to determine who is the right lender, they have not already sold the note and the deed of trust coincides with the note.  If you do not believe me Google James Garfield and watch his various YouTube videos.  He is a lawyer and an expert on the subject.  Then decide if you really want to be involved in your endeavor.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 17 2010
Profile picture for sunnyview
Would you be so kind as to post an informational link or video on Mr. James Garfield? I cannot find his videos on YouTube at all. Thank you.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 17 2010
Profile picture for wetdawgs
@Steve:  James Garfield served before Arthur and after Hayes.  But, I suspect  you had someone else in mind.  You keep mentioning the name, but nothing appears when I google him.   Perhaps you could share the references as long as they don't lead to a commercial site. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 17 2010
Josh,
I would say keep trying and keep in this in mind.  "Timing is everything."
You have a far better chance if you do certain things on certain days.
Your lender could be a hindrance as well.  Is your lender a major gank who can be more trusted or is it xyz lending?

Harold Sharpe
So Cal Homes Realty
DRE Lic # 01312992
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 18 2010
Josh,
Welcome to the new normal!!!!!!!  I'm Las Vegas at the epa center of this mess...Here, over 50% of the transactions are cash....So I here ya. Here is what I have to do..... to get the deal and compete with cash. The competition has not caught on yet but they will....1) double the earnest money amount from what they are asking for.. 2) make it non refundable after your due diligence period. That will make you more attractive then cash.....Short sale to REO's will jump on it.

Good luck..
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 20 2010
With an increase in cash buyers there is a feeling that there is money to be made.  This is actually good news for the market.  You'll need to make your offers more attractive by closing quicker, shorter contingency periods if any at all, etc.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 20 2010
If you are buying REO or a foreclosure from Fannie Mae or Wells Fargo, they usually look at offers in the firts 15 day from owner occupants. AQfter 15 days they allow investors make offers.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 20 2010
Stephen, thanks for the insight!  that makes a lot of sense to put a larger earnest deposit....or we can do an increase security deposit after a certain number of days.  
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 20 2010
Also, attempt to remove as many contingencies as possible; even befor you submit the offer.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 21 2010
best you can do is be strong from the gate, I suggest to my buyers to write hefty good faiths (up to $50,000 on a $220,000 property) make the offer stand out... close in 7 days if you are cash, waive inspections if you have the knowledge to get work proformed ... gearing up the buyer to play like the big boys is half the battle... and that takes time and many times lost opportunities of properties they wanted... this is high stakes poker boys and girls... put up or shut up...
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 22 2010

Josh,

Many times the key to success in a numbers game is not just having the biggest number. As we all know these are bank owned properties, which weigh on the bottom line.  Aside from upkeep, a bank has no want to wait for a borrower to close on their loan from middleman's loan outpost.  You don't have to reapprove cash.  In today's market certainty is the way to go.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 22 2010
Josh, my summary would be:
1.   Strong earnest money
2.   Purchase offer as-is subject only to title (inspect before if desired)
3.   Close as soon as the seller wants
4.   Provide proof of funds with offer
5.   Have a credible REALTOR working with you and establish mutual trust. The right person can make a huge difference in your success when dealing in multiple offer situations.
6.   Make it easy for the seller to say YES.
7.   When you have been successful in your purchase, sent a thank you to the seller, the REALTOR, and the lender (if using one). You'll have them eating out of your hand!
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 23 2010
A few pieces of advice:
1. Patience and consistent follow up on short sales.  Often they take so long that most of the first offerors have moved on by the time it is approved, so you still have a decent chance, even if you are not the first one in.

2. Make sure your offer is extremely clean, meaning no credits for closing costs and other extras.  It must also be submitted to the listing broker as one PDF file with all documentation and offer forms provided in an organized fashion THE FIRST TIME.  This conveys that you are going to be easy for the listing broker/bank to work with and that you have nothing to hide.  Many of the listing brokers are doing a lot of volume and dealing with multiple offers on many listings and will already have a hard time staying organized and do not want to do extra work to piece your offer together.

3. Work with a lender who is well known and respected within the broker community in the area where you are submitting the offer or be willing to be pre-approved by the listing broker's preferred lender.   Do not work with your cousin's roommate's friend no matter what rate he says he can get you.  Not all pre-approvals are created equal - the lender you go with makes the most difference.

4. Make sure you have a buyer's agent who is professional and who knows the right things to say to the listing agent to move your offer forward.  By that, I don't want to give away all my secrets, but they need to understand their motivations, know how to schmooze, and it helps to be well-connected.  The professionalism will show through in the selection of the lender and in the way the offer is presented and when an overworked listing broker is looking for shortcuts in choosing the right offer, this becomes very valuable. 

Good luck and also do not have tunnel vision and rule out a good deal on a standard sale.  There is a lot less competition and sometimes equal motivation with less of a headache and more transparency as to what you are buying.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 26 2010
I have had some of the same issues and it seems that the communication needs to be very good and that as a listing agent you need to take more control than normal to ensure:

Deal is clean
Everyone is on the same page
Financing is with a bank that will perform
Understand the escalation process within the short sale bank
Make sure your short sale seller understand the implications of short sale
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 26 2010
Have any of you had better experiences dealing with agents, attorney's, individual owners, etc?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 30 2010
Joshua:  After adding up all the wasted time and the lost opportunity plus the risk of buying without any contingencies, I believe there are as good a deal thru the real estate MLS without getting bogged down with the banks.  The agents are work with are "strong" negotiators.  They are sales trained and know how to close. Not every agent has what I consider great closing skills, and these are the ones who get me great deals
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 30 2010
Its a fun game, i like what somone else stated that "timing is everything", yet as we know with so much all-cash buyers in the market its still very much an insiders game.  We have bought several homes this last year in LA Co.  I look forward to showing some homes and closing with Blackstone in 2011.  My background is investment sales for the past 8 years.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 31 2010
 
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
Related Discussions
6 Successful Ways to Earn Wealth in Real Estate
Profile picture for Vince Curtis
Latest reply by Vince Curtis
April 12 2013 | 2 answers
  • Posted by Manuel Ramirez
  • In Investing
  • April 09 2013
What is the Key to Buying Distressed Asset?
Profile picture for gabriel jones
Latest reply by gabriel jones
December 31 2010 | 17 answers
  • Posted by McIntire Joshua
  • In Investing
  • December 17 2010
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 4906 Newcastle Ave, Encino, CA Home For Sale
    4906 Newcastle Ave, Encino, CA 91316

     For Sale: $755,000

    • Beds: 3
    • Sqft: 1846
    • Baths: 2.0
    • Lot: 6029
  2. 10481050 S Record, East Los Angles, CA Home For Sale
    10481050 S Record, East Los Angles, CA 90023

     For Sale: $289,000

    • Beds: 2
    • Sqft: 1008
    • Baths: 2.0
    • Lot: 2552
  3. 6882 Alondra Blvd # 26, Paramount, CA Home For Sale
    6882 Alondra Blvd # 26, Paramount, CA 90723

     For Sale: $204,900

    • Beds: 2
    • Sqft: 1058
    • Baths: 2.0
    • Lot: 168164