How to Purchase
REO DIRECT SOURCE
Key Components of an Investor:
• Ready to take action
• Financially able (liquid funds or line of credit)
• Willingness to complete the transaction
All investors and buyers must meet the criteria to be able to purchase a portfolio.
This is easily satisfied by filling out and submitting a Purchase Order/LOI, NCND Agreement
and Proof of Funds (POF).
Purchase Order Request / LOI (Letter of Interest)
We have combined a purchase order and "LOI" form to include all the necessary information to help process the direct buyer's interest.
• Price range
• Geographic locations
• Quantity of properties desired
• Level of repairs (cosmetic, some rehab, no rehab, full rehab, etc)
• Miscellaneous information (elaborate on any information related to portfolio purchase)
Non-Circumvention Non-Disclosure ("NCND") Agreement
The buyer may be requested to sign and NCND agreement to receive the portfolio list. This document serves to keep proprietary information discreet between parties, especially if the seller and buyer do not know each other and are connected by an intermediary (known as buyer mandates or brokers) to complete the transaction.
Proof of Funds ("POF")
All portfolio requests must accompany a proof of funds submission. Investors need to substantiate they have sufficient liquid funds to purchase portfolios. This is an industry standard. In real estate, a home buyer demonstrates their ability to buy a home by being pre-approved for a mortgage loan. When buying REO bulk portfolios, mortgage financing is not available; therefore a buyer must show proof of funds (liquid funds).
Demonstrate and Safe Guard "Proof of Funds" Information
Bank or Line of Credit Statement: before submitting a bank statement, black out the account number, however the investor/buyer's name must be seen on the document. The investor/buyer's name on the bank statement must match the name on the Purchase Order Request form. A minimum investment dollar amount should be reflected on the statement.
Place the minimum dollar amount into an escrow account, which makes this a simple step to verify funds on your behalf. We use a disinterested 3rd party escrow service for most transactions.
Bank Proof of Funds Letter: You may use any official bank document from your bank to authenticate you are qualified to do this transaction. A bank officer can draft a letter on your behalf on their official letterhead confirming the current funds in your account. The letter must include the direct contact name and number of the bank officer who provided the letter. We will contact the bank officer to verify that they drafted the letter on your behalf and the dollar amount of funds available. The account must match the name on the Purchase Order Request form.
Proof of Funds Letter – other financial institutions:
A letter from your private lending source or any other document that substantiates that you have funds to complete a transaction. We will verify the letter, prior to accepting it as a POF document.
NOTE: When a transaction is in progress, a bank/ asset manager will request you to send them verification of funds according to their standards.
An Industry Standard
We will not entertain requests to review lists of available properties until the buyer provides "Proof of Funds". The procedures and rules are established by the banks and other institutional sellers for disposal of their assets.
THE PROCESS: Simple, Fast, Easy
1.) Purchase Order (LOI) and Conference Call
Fill out and submit the Purchase Order (LOI) form. This form requires the buyer's signature, plus the contact information to do the Proof-Up. Once we receive the Purchase Order, we will email the buyer to schedule a conference call. During the conference call we will go over the buyer's request. If all parties see a value in establishing a working relationship, we will move forward to the next step.
Conference Call: We will call the buyer to verify the order requested. We work on behalf of the buyer, it is important to speak with the decision maker directly. Closing the transaction in an efficient and timely manner is important. Depending on the situation, we may allow the buyer to have one intermediary on the call (buyer mandate, buyer rep.).
Upon completion of the conference call, we will request a Proof of Funds ("POF").
Typically, a new client may feel apprehensive sending in "POF" verification documents.
Scroll up to read about Demonstrate and Safe Guard "POF" Information.
Verification of signatory is essential to the process; if we cannot verify funds or signatory (true buyer) we will move onto the next buyer. Once we have determined you are a qualified buyer, you will begin to receive available portfolios as they come in. Be prepared, the buyer may be asked to make a refundable 10% deposit on the desired or custom REO acquisition.
4.) Obtaining Lists/Portfolios
REO Portfolios are sent out as soon as we receive them to all of our qualified buyers. We respond to the first buyer who signs the purchase document. The buyer will receive that portfolio package. We work on a First Come – First Served basis. We have many interested buyers and we cannot hold onto portfolio packages, in many cases these packages move within hours of us receiving them. Buyers are given a 48 hour period for due diligence.
5.) Final Step: Purchasing a Portfolio
Upon acceptance of the portfolio package there is NO backing out. The required documents will be presented to the buyer for signature along with the details of the transaction. The funds will need to be wired within 24 hours of acceptance of the package. When payment is complete for the REO portfolio, the bank will provide the buyer with affidavits of sale within days of the purchase and the deeds will follow. You now own the properties.
"Buy Direct....from the Source"
If you have questions, email us. (Serious Buyers Only)