Can you flip REOs?

[investinAK]

I found an REO that they want $146,172 for...The FMV is approx. $205,000, which is approx. 29% discount from FMV...My only concern is, I have heard that it is difficult, if not impossible to get an REO under contract and then flip it...Is this true? Is there any way around this? Would a double closing work?

[REIaddicted]

I found an REO that they want $146,172 for...The FMV is approx. $205,000, which is approx. 29% discount from FMV...My only concern is, I have heard that it is difficult, if not impossible to get an REO under contract and then flip it...Is this true? Is there any way around this? Would a double closing work?

Most REO's sale as is with no contingencies.. so you have no out and you are stuck with the sale. If you don't have the resources to buy, there could be trouble.

You would have to move fast ! Reo's only give about 30 days to secure and buy. IF you already have a qualified buyer, you absolutly know they have the funds... you could do a double... But this is a risky one as far as time goes.
Lisa

[Just Information]

I am not sure where you are getting your numbers on the FMV, but I will say you need to look at it this way you need to ask yourself on market for 146k, FMV 205k, Did not sell at foreclosure sale, WHY?

Most REO's properties do not allow any contract clauses such as and or assigns, inspection type clauses and so on. You will with most REO properties have to take title before you can sale the property. The REO business normally requires money nothing creative.

[Brian NC]

I heard Steve Cook say he ran into this problem and this is how he got around it. He created an LLC to buy the property and then sold the LLC to person he was flipping to.

In other words if he was going to flip and assign the deal for $5000 to his buyer, he just created the LLC, the LLC bought the property and then he sold the LLC to his buyer for $5000.

Brian NC

[investinAK]

Yeah, I think I remember reading that on his his page in one of the articles, the only problem with that for me, is it takes a few hundred bucks to form the LLC (from what I have seen and heard) and that causes a problem as at the moment I am cash strapped, but in the future I will definitely try it out. :)

[TommyOH]

I have noticed quite a few visitors reading this thread lately. I'm not sure if it's still open, but for an update, yes, you can flip REO's. It's not the easiest thing to do, but I've done it a dozen times at least.

Sometimes the "and/or assigns" can slip by them and they have to alow it once the offer is signed. Also it's not too difficult to do a double closing or simultaneous closing if the buyer is an investor and is using cash or private or hard money.