REO FAQ
Sunrise Property Group Bulk REO FAQ
Revised Oct 17, 2008
Q: What does Post-REO mean?
A: Real Estate Owned is the term that banks use to identify their foreclosure properties. These properties are now called non – performing assets (bank is not making money on them). We call our properties “post-REO” because they were REOs when WE bought them and now we are making them available to YOU.
Q: What is a “bulk / blind” REO package?
A: We buy our properties in bulk, sight unseen, and with no warranties or representations as to the condition or value of the properties; we sell them in the same exact fashion. We make no representations or warranties, expressed or implied, as to the value or condition of the properties we sell whatsoever. All properties are sold “as is, where is” and “with all faults”. Due diligence is solely the responsibility of the buyer.
Q: Where do your properties come from?
A: We purchase from a variety of sources, including banks, Asset Managers, Auction Houses, FNMA, Freddie Mac, and various compilers.
Q. Why don’t you provide BPOs or other valuation?
A: We buy and sell our packages bulk / blind and make no representations or warranties, expressed or implied, as to the value or condition of the properties we sell whatsoever. Furthermore, BPOs are just an opinion of an agent trying to get a listing and are typically outdated and inaccurate. It is important that you do your own due diligence.
Q: How do you price your portfolios?
A: We price our portfolios on a cost+ basis. Our aim is to make a little bit on a lot of volume. The cheaper we buy, the lower your price. Our portfolios are marked up marginally in order to offer aggressively priced product and win repeat business.
Q: What type of payment do you accept? Can I finance these deals?
A: We give cash buyers priority. You are expected to have either cash or line of credit for purchases. Commercial loans or hard money loans require assessment of collateral, which will not work for bulk / blind REOs. However, we have the ability to finance purchases. Send us an email with your request and a Proof of Funds as we will require a minimum down payment of 25%.
Q: What is a “daisy chain” and what are intermediaries?
A: If you are unfamiliar with these terms you are VERY FORTUNATE!
“Daisy chains” are when someone who knows someone, who might know someone that went to school with this guy who might be interested in purchasing some real estate. As the name implies, it is a “chain” and all it takes is for one link in the chain to break before it all falls apart. We have been victim to them in the past and if you’re reading this you probably have as well. We do not deal in daisy chains; we deal only directly with buyers (or buyer’s mandate). Intermediaries should have their own agreement with their buyers outside of our transactions.
Q: I don’t see the full addresses / information of the portfolios; what is required to obtain this?
A: We provide our prospective buyers with general summaries of our portfolios. After providing a Letter of Intent and a Proof of Funds, we will release the full addresses for your consideration and research.
Q: Why do you require a Letter of Intent and a Proof of Funds before I can see your list of properties or receive a contract?
A: We have literally wasted hundreds of hours talking to and working with “investors” that have no means of actually making a purchase and we simply cannot waste our time this way. We deal only with accredited and sophisticated investors.
Q: Will you break up a portfolio?
A: Sometimes. When we own the properties we market we may allow you to break up our packages in quantities no fewer than 10. Some restrictions apply. Email us a serious offer. Buyers are still required to provide a Letter of Intent and a Proof of Funds.
Q: I am not a sophisticated investor nor do I have the means to buy bulk blind REOs; what other options are available?
A: After purchasing our portfolios many of our investors ask us to help with the disposition of their properties. This is an excellent opportunity for unaccredited investors to “cherry pick” properties (at a higher price, of course). It is often times a great win-win solution; send us an email if you are interested.
Q: Why don’t you use an escrow account for buying bulk blind?
A: Escrow is typically used in a traditional closing where the buyer and seller have requirements to meet before funds are disbursed. Bulk / blind REOs are sold without any contingencies and therefore there is no need for an escrow company. However, some buyers may feel more comfortable using an escrow company for their first purchase and we are able to accommodate them.
Q: Why aren’t all the deeds immediately available?
A: The banks and other sources have thousands of deeds to process. As their lawyers make progress on the paperwork and provide deeds to us we will, in turn, title them to the buyer. For any deeds that are not provided to us within 90 days we will gladly refund your money for those properties.
Q: Can I choose which city/county/region the properties come from?
A: Yes! Please visit our page on customized bulk REO orders for more information.
Q: Do these properties have clear title?
A: All properties have marketable title clear of all junior liens. Sometimes encumbrances such as IRS Liens, unpaid county taxes or water bills may have survived the foreclosure auction or they may have accrued between the time the bank foreclosed and your purchase. Title insurance is recommended.
Q: Are these properties occupied?
A: These properties are generally vacant. However we make no warranty that properties are vacant at the time of sale.
Q: Are these properties listed with a real estate agent?
A: Some of our properties may have once been listed on MLS when the banks were trying to sell them as REOs and not removed after we purchased them. You may sometimes find a few of our properties still listed for sale.
Q: Do you have commercial or multi-unit properties?
A: Most of our inventory consists of single family homes; however we frequently have duplexes mixed in our portfolios.
Q: Why can’t I go directly to the bank?
A: Most Banks and larger institutions require deposits in excess of $50,000 just to gain access to their bulk reo portfolios. Our relationships allow us to buy from such sources and make these portfolios available to you.
We are in the business for the long term and not for one deal. This means we strive to provide the best products and service to our clients to ensure your referrals. Our team works at the highest level of integrity and confidentiality.