Posted by Profit-Jay on May 02, 2008 at 23:39:32:
Are you interested in gas stations (bulk) I can also get you the fuel. Call James @ 7702565978
Non Performing / Performing Notes / Bulk REO’s - Posted by Ted
Posted by Ted on March 11, 2008 at 15:05:42:
What is the “reality” of closing a deal involved in trading Non Performing, Performing Notes or Bulk REO’s?
I ask because my associate has become a mandate with 2 banks and has been working feverishly on putting deals together. My involvement has been in bringing qualified investors to the table.
Re: Non Performing / Performing Notes / Bulk REO’s - Posted by Michael Shasteen
Posted by Michael Shasteen on September 23, 2008 at 07:59:23:
I am looking for direct sources of sellers for Performing Notes. I am the direct rep for the buyer. There is no one between the actual buyer and myself. Contact me if you have a true selling source.
Funds to Flip REO’s & Short Sales (Nationwide) - Posted by REO’s
Posted by REO’s on September 07, 2008 at 09:03:55:
Do you need financing that will let you close more deals and provide you with an extra 1% commission on the loan funded?
This is not FHA and there is no bank qualifying
For more information please go to: http://www.we-provide-the-cash.com
Re: High… For Serious Sellers! - Posted by David Butler
Posted by David Butler on March 12, 2008 at 22:38:53:
Hello Ted,
Over the year’s we’ve discussed this frequently - as have others in our industry, such as Mike Morrongiello, Terry Vaughan, John Behle, and experienced folks - with regard to what we generally refer to to as “bank-to-bank” transactions (we call them that because generally, if bona fide, these things aren’t openly shopped out in the broad public, especially through Internet). Unfortunately, most of that discussion was not in this particular forum - though I note that some of the important points where brought up again a a recent discussion here down below at: Bulk REO’s http://www.creonline.com/cashflow/wwwboard3/messages/23863.html
You’ll observe some indirect solicitations also appear in that thread, containing red flags that indicate they are likely not legitimate (I notice a bit of the same here in your query, by way of the reference to “seller mandate”. Though we have seen over $700mm of REO/NPL/PP sold since January 1, 08 in our corner - none of that involved any so-called “seller mandates”. More on that below). Otherwise, some of the discussion in that thread should be helpful for you there, and I will add to it now here to add to what has been said, and try to help you from getting caught up in what has become perhaps the most nonsensical business model to come along in the cash flow industry in some time - in its scope and severity.
Bulk pool buying, whether for REO, NPL, or PP, is an esoteric mix of both art and science. It includes a lot of the same undefined but somewhat identifiable processes encountered when attempting to purchase smaller Oscar/Duck (Acey-Ducey) packages. And there is already plenty of discussion on that topic in the archives here, as well as in the Main Discussion Group, and in the RE Financing Forum.
For our purposes here… right now unfortunately, the market is FULL of dilettantes stirring up a lot of “make-believe” deals. This is particularly problematic on the SELLING side of the deal. We now have a lot of “pretenders” running around with copies of spreadsheets or “cut & paste” crapola that makes no sense - in this rapidly expanding niche. So, make believe sellers, and “seller mandates” with make believe spreadsheets that don’t provide necessary information, or are prepared in a haphazard manner.
These folks are having a lot of fun throwing around new “bank industry” jargon (given the mess the “bankers” guys have made of the world economy, it is plausible that they could be trying to screw up the bulk acquisition industry too ;-)… ) though we are not so sure they are responsible) - coming up with all kinds of ridiculous “buying procedures”, “inspection procedures for making a bid”, etc., and using using terms such as:
“mandates” (finders or brokers who supposedly have some authority from a principal - though we’ve not had a single
one of the folks using this term conclusively state what it truly is supposed to mean in terms of making a deal happen.
More often their attempt to explain it makes it clear they are not a real player - which fortunately allows us to save
time by cutting them off);
“compilers” (folks who supposedly provided services to institutions who have no knowledge about how to put their
loans into spreadsheets. Often described as ex-exployees possessing such skills, who have access to product, and
are passing it around to folks besides the seller’s mandate??!!);
“tapes” (esoteric term for spreadsheet of loan or REO “pool”, i.e. portfolios)
“LOI’s” (Letter of Intent; but often used in different context than we teach)
“POF’s” (Proof of Funds; great in concept, but real players don’t need them!)
“NCND’s” (NonCircumventionNonDisclosure Agreement)
“3 point fees” (many of these knuckleheads are demanding, or passing along demands or 3 point fees, to be divided
1/3-1/3-1/3 between participating “brokers”. Unless the deal is for $5mm or less, this is a fairly conclusive indication
that the whole thing is being passed around between “wannabes” who have no buyers, or no real product for sale
(that 1/3-1/3-1/3 talk is also generally a dead give away that the so-called “mandates” or the other intermediaries are
novices, and chasing their own tails with “make-believe” product offerings).
We routinely get “bombed” with emails claiming “Our contact is direct to trading floor”; "My associate has several contacts for REO buyers [sic] and was the person who put us in contact with and has a new contact for "; “Have more REO’s than we can handle from $$ million to $$$ million plus”; "I need to hear from you ASAP, these packages are moving and they are moving fast. 60+4 1-2-1 Needs an LOI made out to “The Seller on Record " & a POF”; ad nauseum.
What deals there may actually be behind all this rigamaroll already requires too much time and effort, for relatively small probability of closing. For almost any serious players… all the “protective” paperwork comes into play when the players start actually playing. If they have a deal, they need to show us EXACTLY what they have, and withholding only the proprietary “seller” info.
We do NOT provide LOI’s, POF’s, NCND’s, or Title Accounts until bid is made and accepted. At that point, once intermediaries finalized NonCirc/Fee fee agreement, LOI will be provided to the seller’s broker, as the actual bid. Upon sellerâ??s acceptance, buyer and seller will generally work directly to proceed toward closing. Our offers subject to due diligence and Fade-To-Value repricing if necessary â?? underwriting for each loan generally includes new buyer generated BPO for valuation verification. Our Buyers will adjust bid price downward if new BPOâ??s indicate reduced valuations.
INTERMEDIARY FEES â?? there are no 1/3-1/3-1/3 fee splits or 3% fee structures offered or accepted, unless Seller is paying fees and has provided for same in LOA with selling broker. Please advise at time of providing pool information, if that is the case.
Otherwise, intermediaries, including us, typically will be splitting 20% to 24% of total fees provided (typically fees range from half-point to 1.5 points, calculated on UPB, depending on buyer, and size of UPB being purchased). Fees will generally be split on a 50/50 basis between ourselves, and the selling intermediary presenting the package to us.
Though certainly not the “Bible” on bulk acquisition, this is our way, and the way of many of our peers. Perhaps someday, when somebody demonstrates conclusively that the more difficult “hoop-jumping” being proposed now is the only way to make Bulk purchase deals happen, it may cause a change in direction… but that time isn’t here yet - at least in my view. And we’ll be better off if it never comes.
Hope that helps address the points raised here, and in several of the other related threads that are cropping up more regularly with regard to this topic; and…
Have Fun For A Living
David P. Butler
www.hotspurinvestmentgroup.com