Hi i'm in South Florida and all the best deals seem to be the REO listings. Can any REO agents give me some advice on how to contact asset managers to get REO lisings? Or whats the best way to approach them?

Thank you
Thomas Martin

You're about four years late to catch the REO bus in South Florida.

1) Be careful what you are getting into, it is not all it is cracked up to be.
2) Search and read the forum for all of the answers you are looking for.
3) I agree with what Ben wrote too.

Its all networking. If you dont have any contacts inside of any banks big or small you will need to start and start quickly. It is not easy to break into.

You also better have $50,000-$100,000 lying around in the bank. When you do REOs you have to put out the money for utilities, cash for keys, trash outs, locksmiths, repairs and improvements like painting, carpeting, etc. You will become a full-time property manager, and you will be in charge of kicking people out of their homes. Then you will take these below market value assets and spend your afternoons entertaining lowball offers from every slimy grubby cheapass baastard who watched late-night TV and wants to become a foreclosure "investor". Then of course, dealing with all the break-ins, and vagrants, and vandals, and cretins. And fighting with appraisers who are instructed to value the asset as if it were not a foreclosure. Are you getting the picture, because I've only begun to paint the picture - that was just the base coat. Ready for colors?

I don't know about the $50 to $100 thousand unless you're really into big volume. For a small REO operation like ours, you can expect to have as much as $10 to $20 thousand out at one time, especially if you have a couple of big evictions or trashouts.

The worst part of listing REO's is the commission structure. A lot of the banks and their AMC's are cutting the listing side as this is written. Fannie just did effective July 1. And if the AMC is taking a referral fee, the listing agreement usually spells out that the fee MUST come from the listing side, it can't be split between list and sell.

In general, you'll find that REO sellers have very little respect for their listing agents, no matter what they say in the "mission statements" or their speeches at conferences.

$50-$100k is not entirely unreasonable. It depends which clients you have. I'd say I'm averaging $1000 per property waiting for reimbursements. That doesn't take into account paying a driver to visit properties every week or an assistant, though.

I'll agree with navarac about the cheap bastards who watch late night TV about buying foreclosures with no money down. They call and think they can make offers with no financing or no proof of cash, or even no earnest money. Then besides arguing about that they will want to offer 50% of the list price.

You make me smile...I thought only Virginia had those buyers!!!

I love those "How much will they take for that place", usually before they've even seen the property. My standard answer is "I know they will take the list price with a cash offer to close next week."

Some of those are merely "Bird Dogs" or "Straw Men" looking to create a contract for which they can sell the rights to a real Buyer/Investor (who doesn't have the time to do this kind of scouting, or sniffing around activity).

You can also break into the business starting off with short sales. Build a relationship, and see where it takes you. reo prep has a nice program that actually works. They are a sponsor here as well so you can click on their advertisement here on the site.