Alternatives for Wholesaling REOs in 2013

While there are still many bank owned properties out there, a combination of factors demands that real estate investors look at new options for wholesaling REOs for 2013 and beyond…

Four more years of Obama is assumed to mean four more years of the same real estate trends unraveling. This means improving home values and more foreclosures but also more competition at auctions and over MLS listings which come online too.

So what are the alternatives for those who have focused on these tactics for wholesaling REOs?

While there are still many REOs out there, there is no reason to assume they will flow onto the market any faster, even if there is a surge in new filings.

What is important for real estate investors to get is that, while the pool of publicly available bank owned homes may be overrun by competition, there are over $246 billion in delinquent home loans in the works at banks according to the latest data released in September.

Some of these delinquent mortgages will be reinstated. Some will be sold as short sales, though this could be far fewer unless cash for relocation and tax incentives are extended beyond the end of 2012. The rest will work their way to the auction block, unless forward thinking investors are proactive and contact lenders to intercept them.

Some wholesalers are attempting this, though ironically far too many are simply focused on targeting the largest banks just as everyone else is. If you really want to get ahead of the competition, think about the sources that aren’t being hit as hard. What about smaller banks, what about credit unions, what about asset management companies?

Getting even more creative, what about taking these properties down as non-performing loans and wholesaling mortgage notes?

Of course common sense also says that in addition to wholesaling REOs, there are many other distressed or highly motivated sellers out there who may not necessarily be in foreclosure, or at least not in default on mortgage loans.

Many have found that marketing directly to these homeowners is tough, while others manage to kick out the simplest campaigns and rake in huge results.

The difference and answers to generating improved marketing results can be gleaned for Obama’s winning election campaign. Like him or loathe him as a president you’ve got to respect his team and their marketing genius.

First they realized that ‘junk’ advertising ceased to be junk when it was highly targeted and timed correctly. Get to understand them; what is it they really want, why they haven’t jumped on other ads and what are their preferred shopping habits?

This vote amassing machine also recognized that while social media is great, internet ads are great and even cold calling or knocking on doors can work, they are much more powerful when fully integrated together in multimedia, multi-touch efforts instead of being treated as completely separate stand-alone verticals.