99% Financing For REO Properties Works!
March 27, 2010 by admin
Filed under Business Development Training, Financing Strategies
Yesterday, I followed up on a dead deal from last year and found the following.
The owner informed me that the property was in foreclosure. I asked for the lender and he gave me the lender and his bank contact also.
I call the lender and started digging in. Here what I found!
The property was not in foreclosure yet. The loan was in default and the Lender was working as a broker to sell the property to avoid the foreclosure.
Property Data
Property age: 9 Months old.
Property Class: A
Occupancy: 85%
Original Loan Amonut: $11 Million
Recent appraisal: $7Million
Asking Price: $5 Million
My Offer: 46% of the appraised value: $3.2M
The offer was received with great interest. I was told I must close in 30 days, and I insisted on 45 Days.
Here is where it gets really interesting.
I went back to the original borrower and asked if he would like to get his property back. He responded with a fast yes.
When asked what was he willing to pay for it he said “$5.2Million…. That’s 72% LTV.
I told him he would need 2% down. He responded that he was willing to put 5% down if I could make this work.
We settled on a $5.0 M price.
Watch these numbers carefully.
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Appraised Value: $7 M
Max. LTV=70% = $4.9 M
My Purchase Price = $3.2 M
Selling Price = $5.2M
Down payment = $300K
Net Profits At Closing= $2Million Net
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This one Lender has 3 similiar properties . All are class A up and running.
Can you see why you only need 1 Deal, 1 Lender and 1 closing per year.
Where I thought I had fail, is where I found success.
How many times have you heard these excuses:
- “He just got lucky”
- “She just happened to be at the right place at the right time”
- “It’s easy when you have their talent”
- ” They have all the resources”
Success without repeated and continuing failure is simply a myth. If you want to succeed, start by failing faster. And keep doing it. Just so long as you don’t fail the same way twice, you can’t help but learn something in the process. In time, you won’t be able to avoid success. Sooner or later you’ll learn so much that you start failing to fail. Get bad enough at failing and folks will start calling you lucky.
We should all be so “lucky”. http://www.youtube.com/watch?v=45mMioJ5szc&feature=youtu.be
This is an awesome deal. You sure make it look easy.
This is great to hear! I am glad your techniques continue to prove their value and worth!
Durante, truly fantastic! You are extremely gifted at your craft.
durante it is the foremost creative financing since people first knew of slice bread . unless you implement these strategies then you want reap the rewards. once again thanks durante.
This is what your whole system is about… EXPECT these deals.
You simply can… based on your(TopGun) focus.
Why flip a SFH full of distress when you can solve a Jumbo(loan) problem and everyone Wins!
I always learn something great…. pretty soon I be so full of greatness I might even DO something great!
Durante, you make it seem too easy but you are truly gifted that way. It’s true it is all about the financing.
The results are phenomenal! The technique and execution solid. I see several take aways here that can be exploited:
* Revisit Old Dead Deals
* The property was an “A” property and not distressed
* Lender’s very willing to do a short sale workout
* Lender agreed to a fraction of the appraised amount
* Sometimes you might have a built in buyer
* There are more deals ready and right behind this one
Bottom line is that I need to be willing to fail more…starting today.
Excellent, thank you!
Bryan
Durante your techniques are the best, you have proven them time after time
Durante this by far is the best training you’ve devised. Truly it can literally make millionaires!
As usual Durante this deal illustrates several points that you have wanted your students to learn and use: (a) keep a list of your so called “Dead Deals” for they might be revived later on, (b) there is always a way to profit from problems presented to you if you will learn to think first outside the box, (c) seek a solution that is a win-win for all parties involved, and (d)lastly but definitely not the least, always ask The Eternal (Gd) for insight.