We all want to turn lemons into lemonade, but what’s the winning recipe in this decidedly downtrodden economic environment? Increasingly, savvy investors are finding ways capitalize on these historic conditions with REO property. First, let’s define REO. Simply put, a Real Estate Owned investment is property that has returned to the mortgage company or bank. This typically occurs after the bank has unsuccessfully attempted to sell the property at auction to recover the value of the loan.

It’s very common that these distressed properties are not bought, or even bid on, at auction because they are actually worth less than the value of the loan. In fact, being “under water” by owing more than the value of the home is why the original owner couldn’t simply sell the property and avoid foreclosure.

After the original homeowner misses mortgage payments and the home is not sold at auction, it is repossessed by the bank. This is when the property is classified as REO. At this point, the bank will negotiate with vendors and the IRS to remove liens and pay other items like homeowner’s association fees. If the original owner is still living in the home, the bank also handles eviction. Basically, they try to package the property and make it ready to sell.

Many of the REO homes are in less than pristine condition, with basic maintenance ignored and in need of many repairs before it’s ready for the retail market. The bank, not being in the business of fixing homes, will want to sell these assets in “as is” condition. This means you could pay a relatively low amount for a property that can be fixed and sold for a profit.

REO property offers the prospect of profits, but you must be diligent. REO offers both opportunities and challenges with additional issues including property preservation, title issues, code compliance, liability, the need for repairs before qualifying for financing, and turning a “fixer upper” into a home for the retail market.

Other issues are that banks can be stubborn and decide to hold on to REO properties for years instead of lose money on a deal. Or you might get a REO house for a real bargain, but see profits evaporate when repairs and renovation costs spiral.

One other way to make money from REO property is to bypass the banks and seek private investors who buy bank-owned REO assets in larger portfolios. Since these private investors negotiate with banks and buy REO investments in bulk at less than market value, you can shop around for the deal that makes the most sense for you.

Returns on REO properties from private investors differ, of course. But you could see around 15 percent ROI (Return on Investment) at the end of the project. There seems to be consensus among industry experts that “the long game” of buying, fixing, and holding property for eight or more years can provide an enormous return-allowing you to triple your investment.

Do your research, pick a strategy that works for you, and turn the lemons of today’s market into lemonade for your future.

Short sale transaction funding is most often used by financiers who are talented at getting bargain deals on foreclosure homes and then turning them around for a profit. At this time more folks have an interest in visiting this business, making it important to explain how and why this type of transaction funding is secured.

The idea of flipping real estate has taken on a particularly glamorous role as a method to get rich easily.

The definition of a short sale is when a home is about to be lost thru foreclosure and a deal is struck for an investor to get the home. The lender and the homeowner have to all agree on the particulars of the sale and the bank frequently walks out of the deal with less than they are really owed on the loan.

Usually, a stockholder will be offering to pay a negotiated amount of cash upfront so that the bank recoups some of its cash and the householder is off the hook and avoids foreclosure. Everyone is short changed a little, but the investor walks away with a great amount.

In order to secure that great deal, mostfinanciers will have to find some quick transaction funding to support their duty to pay for the property outright.

It used to be that finding non-public banks prepared to work in this capacity was difficult to find unless you knew somebody already in the business. If you have an interest in trying your hand at flipping property or perhaps just want to snag up a short sale property to live in yourself, the Net is your primary source for the best lending opportunities.

Morgan Foreman is a recommended expert in the field of foreclosures and short sales. He will show you how to get guaranteed transaction funding with no cash or credit needed. Do you need a proof of funds letter? Learn about Transaction Funding and check out www.WeProvideTheFunds.com

Selling Your Owner Financed Loan – FAQ

If you’ve ever taken out a mortgage with a bank then maybe you’ve experienced this: about 6-8 weeks after closing you receive a letter from a totally different lender who now has control of your loan and you are to send the monthly payments to them.

Well the original bank sold your mortgage or real estate note for cash to another financial institution that wanted a long-term cash flow investment. If you have “owner financed” the sale of your house with the buyer you can do the same thing. Sell your deed of trust or real estate note for cash to an investor who is looking for a long-term cash flow. There are lots of different names for a note: Deed of Trust, Contract For Deed, Mortgage, Loan, IOU, Promissory Note and others. For simplicity sake I’m going to use the term note.

Let’s say you have $80 in one hand and $100 in the other and I said you could keep only one. Well you’d keep the $100 of course but what if I told you you could have that $100 but it will be paid out at $1 a month over the next 8 years but you can have the $80 right now. Well that changes everything.

If you looking to purchase something really special for your family or to pay off some high-interest, nagging debts; maybe you have another promising investment opportunity, or you simply prefer not having the responsibilities and risks of carrying a Note. I can help you sell that note for cash to a buyer looking for a long-term cash flow investment.

Due to the current economic crisis, the price an investor is willing to pay for your owner financed loan has never been higher! If you are interested in finding out how much an investor is willing to pay for your real estate note call or email me today for a free quote.

For a more detailed description of the different kinds of notes please see the faq section of my website or a more in depth overview please download my free ebook “How To Owner Finance Your Home”

Here are some faq:

1. WHO BUYS NOTES?

There are various people and companies who like to invest in real estate notes instead of the stock market, commodities or apartment buildings. They could be a one-person operation, or an office of 4 or 5 people, or 20 people, or a big investment house of 100 people. I don’t put your note on a web site forum and hope somebody sees it or market to people right out of a “How To Get Rich Investing In Real Estate Notes Seminar”. I work with only reputable, long-term investors.

2. WHAT KIND OF NOTES ARE YOU LOOKING FOR?

I can help you find an investor for various kinds of Real Estate Notes:

? Single or in portfolios.

? Single Family Residential

? Duplex, Triplex, Fourplex

? Apartments

? Income Property

? Improved Land Contracts

? Recreational & Resorts

? Commercial Land Contracts

? Farm & Ranches

? Condos

? Vacant Land

? Bulk REO (Real Estate Owned) and real estate property portfolios

? Bulk mortgage note portfolios

3. WHAT IF THE HOME BUYER IS BEHIND IN PAYMENTS?

If you have a delinquent mortgage note I can help you. There are investors who will purchase notes that are behind in payments. If you are frustrated and not getting your monthly payments and just want to be done with the whole thing, I can help you find an investor who will purchase that delinquent note. This includes semi-performing (buyers are over 30 days late with payment) and non-performing (buyers are over 3 months behind in payments) mortgage notes. Get rid of that headache note and let someone else deal with it.

4. HOW MUCH IS THIS GOING TO COST ME?

There is no charge to you, the note holder ever. Getting a quote from an investor is free with no obligation to sell your note and the entire process is completely confidential. The borrower until the transaction is complete. The investor pays all broker fees.

5. HOW MUCH WILL I GET FOR MY NOTE?

This unfortunately I can’t answer, as there are too many variables involved. Each transaction is unique so an investor looks at several key factors for pricing. These include the type of property and location, down payment, equity, the buyer’s credit, how long the buyer has been paying you, and the terms of your note like interest and monthly payment amount. All that goes into their risk assessment and they make their offer based on that. Having said that though an average note will demand anywhere from 80 to 93 cents on the dollar depending on those factors.

6. HOW LONG WILL IT TAKE BEFORE I GET MY MONEY?

All deals vary, but normal closing time is 2 to 4 weeks once the investor starts their due-diligence process (inspection, appraisal, credit check, etc).

7. I JUST NEED SOME CASH NOW BUT I LIKE HAVING THE MONTHLY CASH FLOW.

There are a couple of ways to get creative:

Partial Purchase

A great option for note sellers because of it’s extreme flexibility and because in many cases it is possible to receive MORE MONEY than the original selling price. If you need cash right now but want to keep your note for the cash flow investment you can structure a deal so that you sell just a portion of your monthly payments for a certain amount of cash.

Let’s say that you sold your house for $250,000, the buyer gave you $25,000 as a down payment, and you now have a $225,000 note at 7% interest for the next 15 years. You want the monthly income but are in need of $50,000 cash right away. An investor could give you that $50,000 in exchange for buying “x” number of monthly payments, after which the note reverts back to you for the remainder of the term.

Split Partial Balloon

If your note has a certain amount of payments then a balloon payment at a certain date you can sell the payments leading up to the balloon and a portion of the balloon when it comes due. You get a lump sum of cash at closing and then receive a portion of the balloon payment when it gets paid off.

8. I HEARD I SHOULD HOLD ONTO MY NOTE FOR A NUMBER OF YEARS TO GET A BETTER PRICE.

This is called “seasoning” the note. The reason for waiting is that you are hoping to increase the equity in the house, which will help the note command a higher price. While this could happen other variables might decrease the price of the note the longer you wait.

It’s possible that maybe the property might devalue in price. What if the homeowners rack up a lot of credit card debt buying appliances, furniture, landscaping or remodeling and their credit score goes down? What if the homeowner loses their job and they stop making payments?

An investor looks at many things when assessing risk on a note and how old the note is is just one of them. A 3-year-old note with a bad credit score might be priced less than a 3-month-old note with a great credit score all other things being equal. Every note is different. Brand new notes and 20-year-old notes are sold everyday.

9. CAN I GET CASH AS SOON AS I CREATE THE NOTE?

Yes this is called a simultaneous closing, where a few days after the close of the house with the buyer you receive a check for the note. If you’re going to owner finance your home and you know you want to sell the note this is a great way of doing it because the investor is there for the initial process and you don’t have to start over again 6 months later with another appraisal, inspection, credit check, etc.

10. HOW MUCH DOES THE NOTE HAVE TO BE FOR?

The minimum is around $100,000 if it’s under that then it’s really not worth it for the investor. So a note could be for $100,000, $250,000, $500,000, $800,000, $5 million and everything in between. There are all different kinds of investors looking for all different kinds of note amounts.

11. CAN I SELL MY 2ND LIEN NOTE?

If you have a 2nd lien, where there is a bank or another investor with a more senior lien

against the property, you may be able to sell the note, but the price that you receive won’t be nearly as high. You generally won’t be able to sell those types of notes at any sort of decent price unless the buyer has put in at least 30% of his own money as a down payment or in built-up equity and has fantastic credit. Unfortunately investors just aren’t interested in 2nd lien notes or mortgages right now.

12. IF I OWNER FINANCE WON’T I ACTIVATE THE DUE-ON-SALE CLAUSE IN MY MORTGAGE. AND IF I’M ONLY GETTING A SMALL DOWN PAYMENT HOW WILL I PAY THE BANK LOAN BACK?

The Due-on-Sale Clause is a provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home. It is probably the most talked about, feared and misunderstood topic in real estate.

The link below is to a great article by real estate lawyer William Bronchick and will dispel any misunderstandings you may have about the due-on-sale and suggest a simple, yet effective strategy to get around it.

There Is No Due-On-Sale Jail

If you’re thinking about owner financing your home you can also do a simultaneous closing, where a few days after the close of the house with the buyer you receive a check for the note. If you’re going to owner finance your home and you know you want to sell the note this is a great way of doing it because the investor is there for the process and you don’t have to start over again 6 months later with another appraisal, inspection, credit check, etc.

13. WILL THE HOME OWNERS HAVE TO REFINANCE?

When an investor purchases your note, all terms remain the same. The only thing that changes is where they send the payment. If fact the borrowers are not contacted until the transaction is complete.

14. HOW DOES THE NOTE SELLING PROCESS WORK?

You’re interested in finding out about to selling your note. Give me a call or email and I’ll get some information about the property and note from you. We can do it over the phone or I can email or fax you the form. It’s an easy 2-page worksheet you can fill out in about 10 minutes. It asks for the loan balance, interest rate, length of loan, and basic information about the property. Then with the information you gave me I look for an investor who is interested in buying your note.

If I find an investor who is interested they take 2 or 3 days to crunch the numbers, assess their risk and see if it’s a good investment for them. If they are interested they make what is called a soft quote, which is their best offer before having reviewed any supporting documentation, such as the payee’s credit report and property appraisal. The quote will state something to the effect: “subject to review of credit – assumes good credit” but pricing should not change that much unless the property value comes in low or the homeowner has a low credit score or subsequent documentation does not support the information provided on the worksheet.

If you accept their offer you’ll draw up an option of purchase and sales agreement with the investor. The investor then starts their due-diligence on the property and the homeowners. Just like selling a house — home inspection, appraisal, credit checks, copies of legal documents, payment history and verification of current balance. This enables the note investor to verify the information provided, analyze the risk, and confirm their pricing of the note.

Once all the T’s are crossed and I’s dotted and contracts signed the investor takes control of the note and the title company sends you a check.

Hi Friends,

• Has the current market kept you living in fear?
• Are you making the money you want and need to be making?
• Would you like to truly learn how to become financially free in this economy?
• Would you love to brag to your friends how you became financially free while others went bankrupt in the worst economic crisis of our time?
• Do you want out of the rat race?
• Do you know HOW to get out of the rat race?

Dwan here – as you know I specialize in teaching real estate techniques to folks just like yourself?short sales, wholesaling, rehabbing, lease-backs, rentals, and much more.

Bill and I love sharing with you what we are doing to make money.? We are the only instructors in the country who really share what we do, our connections, and what does and doesn?t work.

For several years, we have been developing our relationships with banks and working on REO/BULK PORTFOLIO INVESTMENTS. In addition to that, we are buying up rental properties as fast as we can get our hands on them.? We are concentrating our investments to the Tampa, Florida area.? We are able to buy solid 3 bedroom, 2 bath houses, clean houses for under $40,000 that rent upwards of $1,000 per month!

The return on investment is amazing!? We are renting through the government Section 8 program.? The Section 8 list has thousands of tenants looking for a place to live and not nearly enough properties available.? Section 8 is the perfect solution!? It creates a win/win/win solution – the government directly pays the rent, the tenant is excited to have a house to live in, and the government pays off the mortgage!? It?s a beautiful thing.

I consider Section 8 to be recession proof landlording.? In many states, Section 8 isn?t the best program out there.? Florida is VERY investor friendly and bends over backwards to make and keep the investor happy.? We also have property managers and rehabbers if needed.

We can offer you as many turn-key properties as you would like.

We have planned a very special bus trip that we would like to invite you to attend.? You must join us on

this ?MOTHER OF ALL BUS TRIPS!?

Here is a sample of how this two-day training breaks down:

DAY ONE –

• We will be in a classroom environment learning the nation?s hottest topic – BULK BUYING!
• Learn how to figure CAP rates and how this will save you thousands of dollars a year.
• Learn what an LOI (Letter of Intent) means in the bulk arena.
• Learn what an NCND is and how it keeps your deals safe and sound.
• Learn why bulk buyers want a POF (Proof of Funds) to move forward.
• Use and implement an MFA (Master Fee Agreement).
• Use and implement an SFA (Sub Fee Agreement).
• Find nationwide bulk and portfolio buyers and sellers.
• Learn how to qualify leads and get the most bang for your buck.
• Become a successful landlord while learning the bulk buying business and much more!

DAY TWO –

• We view as many properties as we have time for.? We shoot for 10!
• We figure CAP rates on each property so you can see if it is a good deal or not.
• We figure rents for the area and what you can do to maximize rent for each particular property.
• We access what rehab is needed to make each property marketable.
• We discuss keeping a rental verses selling to an end user on each property.
• You will know how to determine if any property, anywhere in the country is a good deal for you or not.
• And much,? much more.

Wear comfortable clothing – Remember, we will be in Florida!

The bus holds 47 people.? Our official marketing for ?The Mother of All Bus Trips? starts August 1st.? We will be offering this two-day bulk buying bus trip for $1,297.? We are giving you a chance to take advantage of an early bird special and grab a seat for just $497.? This early bird special is just for our loyal friends.

August 1st, our bus trip will be opened to the public and over 40,000 hungry investors will have the chance to grab a seat.? We expect the bus to be sold out in 30 minutes or so.? Jump on it right now to guarantee that you can attend this special class.? There is NO ONE in the country teaching an REO/BULK buying class and following it up with a bus-buying trip.? We will provide financing, rehab (if needed), property maintenance, and much more.

The REO/BULK buying bus trip is Friday and Saturday August 14th and 15th.

Come?spend two-days with us, learn something no one else will teach you, and invest where we invest.? I can promise you that this event will change your life!

http://theieu.com/bus_trip/

I can?t wait to see you in Tampa!

From The Heart,

Dwan Bent-Twyford

www.InvestorsEdgeUniversity.com

If you’re a preforeclosure financier, with the tightening credit markets, you haven’t any doubt noticed how much tougher it is today to shut short sale deals. During the past, lots of hard money options, together with double closings and concurrent closings made closing short sales a breeze. However, with the credit crisis, mortgage crime, and tighter restrictions with lenders and title corporations, closing short sales isn’t as straightforward as it used to be.

However, there is still one terribly very easy way to shut your short sale transactions without using double closings, hard cash, concurrent closings, or maybe the over complicated land trusts.

That strategy is using back-to-back closings to get all your short sale deals closed and financed in good time. The first exchange is the homeowner facing foreclosure selling to the preforeclosure investor.

So where do you get this funding of your deals? This is typically called transactional funding, and today, there are multiple banks making these sorts of loans. Lenders love transactional funding, because they are only lending for a period of some hours.

With the end buyer’s loan already authorized and in place, 2 separate and distinct transactions happen on the closing day. The 1st is the financier buying the short sale deal from the distressed homeowner.

The end buyer is using funds got by him through a standard loan, or cash. The sole such exception are FHA loans, which at the time of writing this article, have a ninety day seasoning obligation. However, as the estate market changes, and the home market remains volatile, it is very possible the FHA might change its guidelines.

Transactional funding is the ideal way for preforeclosure investors to fund their short sale deals in today’s foreclosure ridden market.

Morgan Foreman is a recommended author in the area of foreclosures and short sales. He will show you how to get guaranteed transaction funding with no cash or credit needed. Do you need a proof of funds letter? Learn about Double Closed and visit http://www.WeProvideTheFunds.com
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The current times present themselves with new challenges for real estate agents and mortgages lenders; potential investors have realized the immense opportunity that resides in the bulk reo property arena and have decided to purchase bulk reos in order to resell them. This potential is for real because new legislation has come along with new requirements. This industry has started to focus and grasp all the mitigation techniques required in order to avoid being enmeshed in lengthy foreclosure processes. By assisting investors in buying the reo properties; the transaction process can be optimized and cycle shortened. Therefore, the entire process can be made easier in order to become available for more investors and eventually homeowners.

After a decade of constant loss mitigation people are beginning to think about imaginative methods in order not to loose their homes; they do everything they can in order to avoid the foreclosure and many creative means have been developed thanks to this aspect. The main responsibility for this disastrous situation is to be found among the mortgage lenders; the easy loans must be left aside in order to prevent people from being financially overwhelmed by the mortgage rates. In a dismal investment environment, investors and hedge funds should avail and purchase bulk reos because they are more profitable; these properties are highly profitable instruments and bulk reo packages present one of the best investment opportunities today. Market fluctuations must be considered in order to establish requisite mortgage rates without making them too overwhelming for end users. Technology is to be used in order to track down all these fluctuations and the bulk reos for sale should be defined according to market demand.

Service providers and reo resellers should use technology in order to speed up the disposition process; by using appropriate expediting methods they can prevent people from loosing their homes. Therefore, in order for a lender to become fully aware of all the possibilities when it comes to the reo sale process, he has to score the entire history of the borrower. He has to make sure that the borrower is financially strong in order to pay his mortgage. Care must be taken this time around in ensuring borrowers are able to afford monthly payments or these properties will fall back into the reo process.

Reo properties are actually the best way when it comes to purchasing real estates at reasonable prices; the bank usually takes possession of all the delinquent properties and every bank is likely to have its own list of available reo properties. If you want to purchase bulk reos, you will have to ask for these lists and many banks already have relationships in place. REO agents have emerged that assist in matching buyers and sellers of REOs. You will have to do your homework and check all the available opportunities in order to make a wise investment. If you are not sure of your knowledge, you can hire an REO consultant to help you in this matter. You also have to be aware that you can actually get the property at a lower price than the one that is demanded by the bank because this institution is not keen on owning the reo properties. Buying such properties may take some time but the entire process is likely to be well paid off in the future to come. Many companies are now packaging these reos for sale to hedge funds and resellers and the entire process is becoming more efficient albeit very competitive.

There are plenty of advantages when it comes to investing in a reo property and every investor is fully aware of the incredible rewards. The main advantage when it comes to the bulk reos for sale is that the agent or the potential buyer will not have to deal with the homeowner anymore. The people who are interested in buying these properties will not have to enter an auction in order to get them; the only thing that they will have to do is to contact the bank or reo seller mandate in charge of a particular property and make a reasonable offer. This offer is to be submitted in order for the bank to acknowledge that a potential buyer is interested in one of its reo properties.

Reports have stated the importance of not rushing into the first reo property for sale; on the contrary, you must be fully aware that not every property is likely to be worth your investment. Not every reo property is an automatic way in order to earn some money and you have to search for all the existing details in order to make sure that a particular property is what you are looking for in order to invest your money.

Buying bulk reos depends on factors that will vary in the case of every investor who is interested in making profitable deals. The investor is likely to be very familiar with shopping around in order to identify all existing opportunities. The particulars of every transaction are to be known because this aspect is vital when it comes to purchasing a particular reo investment package. These particulars may actually vary from one reo package to another and the investor will have to arm himself with all the basic and necessary information in order to handle the various types of transactions that will come along with potential risks and gains.

The investor should try to shop around before making his mind on a particular reo property; bulk reos are to be carefully analyzed in order to determine the risks that are being involved in the process. The reo properties can actually vary from excellent properties to damaged ones and their prices will be established according to their present condition. The reo property can be of real value or it can be priced properly according to its damaged state. Therefore, the real estate agent should take his time in order to shop around; the prices that are below the market value are to be searched for too because real bargains can be found sometimes when looking for bulk reo packages.

You have to be perfectly aware that every reo property will come along with a significant amount of risks that are to be taken into consideration before making the final transaction; if the properties are not certified in value you will need to be able to inspect a property before buying in order to determine its present state. The banks will not be held responsible for any damage and you will have to pay for all the repairs. All these previous conditions are to be taken into account in order to make a wise decision that will not ruin you. The next step is to make a reasonable offer to the chosen bank in order to buy a reo property. There are three main types of sales that can be encountered in the case of a property namely auctions, short sales and reo sales. Therefore, you have to think twice about the type of sale that is likely to suit your financial condition in order to select the right one for you.

The auction is actually the riskiest operation that comes along with a bank owned property; but the greatest financial benefit is also to be expected in the case of an auction because the potential buyers are likely to come along with larger amounts of money. For instance, if you are interested in this auction game, you have to be fully aware that you are going to pay the price in cash as soon as the property becomes yours. You will also have to forego all the inspection strategies and you also have to be aware that you are actually taking advantage of other people?s misfortune. This condition may result into the occupants? refusal to move out from the property and they can even damage your property when in anger.

The short sale is another option you can take advantage of but you have to be aware of its conditions as well. In this situation, you are going to buy directly from the owner without the interference of any bank. You will also be able to inspect the house in order to make your mind; the only inconvenient when it comes to this type of deal is the fact that the bank can actually stall or squash the entire contract before being closed. By knowing all this, you may think twice when it comes to choosing one of these previous options.

Bulk reos are by far the best opportunity. If you are an investor with substantial resources, some of these bulk reos are selling for as low as 40 cents on the dollar. The largest size transactions are selling in the 32 to 35 cents on the dollar. The reo transaction may work better in your case especially if you are interested in reselling the house. The reo property presents the fewest risks when compared to other types of real estate transactions; you will possess clear title and you will also have to right to inspect the property before you buy it. You can even get your own financing in line before buying the bulk reos. The reduced headache is likely to make the difference because you will not have to deal with too many papers; most importantly, risk is mitigated, time and money will also be saved and you are likely to be pretty satisfied at the end of such reo transaction.

The banks are not keen on owning these reo properties; they are more interested in lending money and collecting mortgage rates. Therefore, you have to take advantage of the existing bulk reo packages because this is a real chance when it comes to making the right real estate investment that it will turn out to be very profitable in the future to come.

While it doesn’t seem as grossly belied as six months to a year ago, prospective buyers of bulk REO (known as real estate owned, bank owned or foreclosed properties) portfolios are still experiencing immense frustration in finding product with the aftermath of “intermediaries” operating on the Internet.

Over the last eighteen months, a depressed real estate market, coupled by ever increasing foreclosure rates and a severe downward spiral of fresh mortgages, is only fueling many imploded mortgage brokers to parlay their attempts into linking buyers with banks distressed assets. These internet “brokers” with minimalistic experiences in the workings of liquidating distressed assets, create lengthy chains of “intermediary brokers” between supposed buyers and supposed sellers in their eternal search for product. The end result is they are ill-equipped in delivering product, are ineffective in collaborating with the client’s requests, and do not fully understand the protocol that needs to be followed. Oftentimes, a buyer’s assets are floated in cyber-space filtered from one intermediary source to another. Dissuasion begins to form in the buyer’s mind, he is told he can readily purchase REOs in the low 20 to 30% LTV and gets the false illusion that such packages readily exist.

Another seen result of these “broker chains” is the nefarious plot towards luring prospective clients towards “available REO packages” which emanates from some obscure place and is leaked to several of these “intermediary brokers” who cross-pollinate these packages amongst the “broker chains”. The sad part of this is that many times it ultimately ends up with potential buyers who have the means and the wherewithal to consummate the transaction and end up finding that there is no true platform selling the assets, their time is wasted and confidence in the system eroded.

As a burned child is carried out of a burning house, buyers often find themselves entering another furnace the more they look. We have spoken to several clients who have been searching for REO packages for over a year with no success.

Daniel Bruckner emphasizes that it is important to answer the following questions:

Has anyone explained to those looking to get into the REO bulk buying pool specific questions on the matter? Have these “brokers” ever seen a banks “addendum” for REO buys? Do they even realize that even in a “small” trade of $40M (U.S) in REOs that there are MAJOR title issues, an immense amount of legal work, analytical costs, very complicated contracts, compliance issues and on and on? There is also a plethora of work to secure, insure and deal with the properties let alone liquidating them as well. We have seen several different law firms and countless man hours go into just the due diligence phase.

Since late 2006 to present, there have been 267 major U.S. lending institutions that have imploded. Out of these, the most recent are Wachovia Mortgage, (FSB Wholesale), Lehman Brothers (SBF), IndyMac Bancorp, Mortgages, Ltd and Wilmington Finance (Wholesale).

So, what is the necessitous buyer to do?

“Become educated on the capital markets,” Bruckner remarks. “This is where InvestorEarth’s gregariousness comes into play and gives us the opportunity to further educate those individuals’ expectations.

In a declining global market, many buyers are wrought in difficulty in their pursuit to secure an appropriate ROI. In the declining global market, the preferred investment vehicles of today include REOs, CMOs (Collateralized Mortgage Obligations), BGs (Bank Guarantees), MTNs (Medium Term Notes) and HYPIPs (High Yielding Private Investment Programs) – all which achieve above average returns during a recession. While you may be well-versed on REO’s, the mass of incoming interests lies upon MTNs, CMOs and most excitably HYPIPs. Many, possibly all of these vehicles, may appear unfamiliar to you, Once they are explained and the ROIs realized, the intoxication gravitating towards these programs becomes overwhelming for our clients and they generally want little to do with bulk REOs are they invest forward.

InvestorEarth.com plays a much broader and sophisticated role to high net worth investors and investment groups by educating those who come to us wanting to profit in the dynamic capital markets of REOs, CMOs, BGs, MTNs, HIPIPs and other popular investment commodities.

If you are interested in purchasing Real Estate Owned (REO) or short sale properties, then you need to understand the basics of transactional funding and proof of funds letters and how they relate to your real estate interests and activities.? Essentially, the transactional funding refers to the funds borrowed for a very short period to transfer a property from the current owner, to the transaction coordinator, then to the new owner.? Proof of funds letters are used to help secure financing and smooth the way for the real estate transactions you are involved in.

Transactional Funding

The use of transactional funding allows the short sale process to take place smoothly.? The basic premise for the loan is that once the original owner is ready to sell and the buyer is ready to take over the property (usually with a standard mortgage), there is a short term loan needed to faciliatate the transfer period.? This means that the transactional funding is a loan that exists for just a few hours, before being recovered when the final property owner pays for the property.

The two separate transactions that place on the day of settlement create a unique situation known as a double closing. Lenders like these loans as the lending period is typically just several hours.? If the transactional funding lender ensures that all the other financing for the transfer of the property is in place, this makes this short term loan delivers a relatively low risk opportunity for a profitable outcome from the provision of the short term loan.

Transactional funding works not only for the short sale scenario described above.? A savvy investor can structure the use of a short term loan to easily carry out purchases of real estate owned (REO) properties, or any other real estate transaction that is based around a double closing.

Proof of Funds Letters

When purchasing property, the buyer must provide some form of evidence that they have the funds to cover the property acquisition – this is where a proof of funds letter becomes useful. This document that the investor can use to indicate to the parties involved in a real estate transaction that you have pre-qualified to purchase the real estate.

The proof of funds letters are used to demonstrate that investors have the financial resources or means to fund a property transaction. They indicate to the other parties that your funds are legitimate and can be used for the purchase of the property. This type of document is particularly useful if you are involved in short sale transactions and REO purchases that are structured with a double closing or when using transactional funding.? They can also be used for other transactions that require documented evidence of your financial resources.

To achieve success in real estate investment, it pays to fully understand the different options available to you and how to use them to maximum advantage. Transactional funding and the use of proof of funds letters are two added ‘tools’ in your investment toolkit.? Once you understand how these financial opportunities can be used to the best advantage, you’ll be on track to achieving financial security through real estate investment.