I have been doing BPOs for about a year now. FARVV and CC, and I just signed up with 3 more companies this week (THANKS!) but nothing yet.

My question is this: Is it possible to get REOs without bankrolling? My broker has encouraged me to accept REOs, and said he would help me with them until I become familiar. He dealt exclusively with foreclosures and REOs up until the VA change, and has made the choice as of a few years ago to deal directly with his set of investors. Other agents in teh company prefer to flip or do listings.

We have had two agents though, one about 3 years ago, and one last year, decide to venture back into REOs. Both got burned, badly, more than once. From that, my broker refuses to bankroll anything- even utilities. He said if I want to do the legwork, that is fine, but no financial backing. I am in no position to cover anything.

Does this mean I have to stick to BPOs, or are there companies that will pay direct to the contractors or up front after approval of services? I will spend more time reading backwards if anyone just wants to make that a yes or no question.

I doubt you'll find that perfect company that you're looking for. You could go with OCWEN and just use their vendors - then they'll pay them direct but it's pretty tough to convince people to sign up with them.

REO companies do expect the listing brokerage to be able to pay some expenses up front. If you can find contractors who will wait for their money, good luck. But most want to be paid immediately. Even if you can do that, utility companies won't wait, they have to be paid directly. You will probably have to pay these expenses yourself if your broker won't, or change to a REO-friendly broker. Ocwen does allow your vendors to sign up with them to be paid, but not utilities. I have never had a vendor willing to do that yet.

I am in the same boat. My broker, who strongly encouraged me to do REOs and get a bank owned department off the ground, suddenly got cold feet when it came to bill time.

For the most part I will not bankroll anything above utilities and basic maintenance. I have found several providers that will wait 30-60 days to get paid (locksmith, trashout people, lawn and snow service) and that really helps.

I have never been stiffed on a bill but sometimes have had to wait a while to be reinversed. But once the cycle starts there is usually money coming in for bills to offset the money going out.

If the office is not going to help then maybe it will be time to renegotiate your fees with them once the sales start to come in. Funny how they love success.

Would hate to see you lose out on this over a few bucks. There are ways to keep this under control.

Steele in Minnesota

Some lenders are contracted with various property preservation companies. AMC is with Field Asset Services, HSBC with Safeguard, etc. With AMC, I had to pay the locksmith (took 6 weeks to get paid back) and the utilities- all the rest was through FAS who was paid by the bank. HSBC has Safeguard do the rekeys as well, so my only expense is the electricity. I was notified that Chase is going to start using FAS as well (bad thing, from what I've seen). Try to get on with AMs who handle those banks' properties (maybe others will post those they are aware of) so your expenses are minimal. Right now, I have been waiting for well over a month for more than $3000 I've spent on 4 properties, and I'm about to lose my daycare provider because I've fallen behind to pay REO expenses... It can be quite a drain on your budget, for sure!

Thank you all for the info. Looks like I will need to wait until I am at a place where I will have a few hundred to spare for a few months at a time.

Do the bills have to be paid in the brokerage's name, or can I do it? I know that if I wanted to pay Joe Anybody's utility bills I can, or would I have to make arrangements with my broker to pay toward the company account for the REOs?

You are probably going to have to put the utilities in your name or the name of your brokerage, if they will let you do it.

Keep excellent records!

Eric

Where you are at learn from the other agents flipping in your office,see if you can partner in on some deals or team up.Target homeowners in pre-foreclosure no upfront costs there.

The banks always say they want to sell there properties but are always waiting for the fairy to come and grant there wish of someone paying market value for a house that needs 40k worth of work because the property doesn't look like the appraisal they had done 2 years ago.

This is why if you submit an offer you document everything and use the low end of the subdivisions comps and overemphasize what it will cost you to get the repairs done,it's sad banks play games but you get back what you put in.