| I have been involved in the bulk REO business since | | | | are smooth talking shysters in the industry who are |
| the economic recession and mortgage meltdown in | | | | good at selling ice to Eskimos. Trust but verify. |
| 2008 that led to millions of foreclosures on the real | | | | The next thing you need to do is to find out about all |
| estate market. I communicate with buyers and sellers | | | | the properties in the deal. All it takes is one property to |
| on a daily basis looking to purchase bulk REO and | | | | sour things. One of the scams out there is this: A |
| non-performing notes. The recommendations are | | | | scammer finds out what properties are vacant and in |
| based on my personal experience of meeting all types | | | | foreclosure, and then rents them out for cash. By the |
| of cons in the business. In every article, I will give real | | | | time you come along to see the property, someone is |
| world experiences unlike many of the other so called | | | | living there. The tenant will probably not take too kindly |
| experts whose treatise is mostly based on theory. | | | | to being told that they have been the victim of a scam |
| Con artists and mobsters make sure their co-workers | | | | and that they will have to leave. Use common sense |
| are vetted; you should too. In the case of bulk REO | | | | when visiting these properties - think of it like being a |
| deals, it pays to know who and what you're dealing | | | | bail-bondsman for a day. |
| with. You're entering a high stakes game and it's tough | | | | In a bulk REO transaction, take a very close look at |
| to know if buyers and sellers are legitimate; you may | | | | the properties from the seller which is sometimes |
| be strung along for a time during the onset of a deal, | | | | referred to as "bulk REO tape". The bulk REO tape is |
| or things might look perfect right up until you see the | | | | normally a list of properties with the addresses, city, |
| contract. I'm of the opinion that paperwork for a | | | | state, zip code and property type. Con men will |
| large-scale project like this need to be seen by a | | | | sometimes copy and paste properties onto a word |
| lawyer. | | | | document or a pdf form. The properties can |
| In every market, there are frauds, shysters, con artists | | | | addresses from the MLS listing or properties that are |
| and shenanigans and the bulk reo market is no | | | | vacant or already sold. Check the properties on the list |
| different. you are apart of a market that involve billions | | | | by checking with the county assessor or the |
| of dollars and it is not always easy to know if the | | | | courthouse. Find out the status of the property. Who |
| buyers or sellers are authenic. It is possible to be led on | | | | was the previous owner? Was the property sold at |
| a wild goose chase through out the transaction, or just | | | | an auction? Who owns the property now. How much |
| the opposite, the parties might all seem like saints until | | | | was it sold for? How much is it being sold for |
| you get ready to sign the bottom line. If you are | | | | presently. |
| planning to close a high end deal, proceed without a | | | | Other real estate scams abound: Lending, Short Sale |
| lawyer at your own risk. | | | | and Bait + Switch Contracts to name a few. You can |
| As a timeline, there are a number of things to navigate. | | | | find a lot of great advice out there one these different |
| First and foremost, find out about the person you are | | | | scams, but as an over-arching piece of advice I live by |
| dealing with, and let them find out about you. Ideally this | | | | one rule, "Don't do anything stupid". The only addendum |
| is someone you would trust to pack your parachute | | | | to the rule is that if you think you might be about to do |
| before you skydive. They should be comfortable | | | | something on the stupid side, you have to ask a |
| enough with you that they would let you do the same. | | | | trusted confidant what they think; in this case your |
| If you're at the point where you're considering a bulk | | | | lawyer. I know lawyers get a bad rap, but when it |
| REO deal, you probably already have some internal | | | | comes to avoiding a bulk REO scam, they will earn |
| radar that can identify a scam. However, the con | | | | their keep. |
| artists are really good at their jobs too, so never | | | | For example, I was given tape from a "so called" seller |
| assume. There are probably some Bernie Madoff | | | | who sent me tape with a list of nearly 100 properties |
| types out there right now. | | | | for sale in California. After contacting the county |
| There are many things to pay close attention to when | | | | assessor's office, this is public information, I discovered |
| closing a bulk REO deal, this article is part 1 of a 5 part | | | | that the tape was a "cut and paste" job. Some of the |
| series. The first step is to never do business with | | | | properties were owned by home owners who had no |
| someone you don't trust. this is an old axiom but needs | | | | intention of selling their homes. Some of these |
| to be repeated over and over again. Trust your gut | | | | properties were already on the MLS listing selling at |
| instincts. If you are uncomfortable with the parties | | | | retail. The whole point of buying bulk REO, to begin |
| involved in the transaction you ought to consider | | | | with, is to buy in bulk at a discount.stay tuned for more |
| moving on. Find someone you can trust with | | | | in part 2. |
| references. Having said that keep in mind that there | | | | |