REOs

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In the "boom" of the foreclosure market, REOs have become a popular investment tool for both institutional and private investors. Known as "real estate owned", these properties have been returned to the bank after attempts were made to sell the property through foreclosure auctions. Since banks are in the business of lending money, not owning property, properties are offered in bulk at steep discounts. The "over-stock" of REOs today, is directly connected to the failure of many banks and lenders. Too much inventory and not enough operating capital means banks are offering their REO packages at historically low rates. Without an REO Specialist investors do not have an established inner-bank resource to truly maximize on REO opportunities and usually face mark-ups, or sales from third party liquidators who have diluted the margin of profitability.

Typically, in a strong market a good REO Specialist can acquire viable property for about 80 cents on the dollar. In TODAY'S market, good, rent/move-in ready property can be acquired for as little as 50 cents on the dollar. Most REO liquidators buy these properties in bulk, mark them up to about 70, or 80 cents on the dollar and re-sell them individually. Others will convey that they are selling them for 50 cents on the dollar, against the loan value. However, the loan value is approximately 30% higher (or more) than today's fair market value, so what is being conveyed is typically a half-truth with regards to your margins of profitability.

PIP-West provides its clients the opportunity to negotiate directly with the bank and essentially determine LOCATION, TYPE, COST and at what margin against TODAY'S fair market value they want to acquire property. Our investors can pick an area, get a list of properties from the bank that meet the investor's terms and even have TWO WEEKS to perform any due diligence, prior to purchase.

So what is the catch?
Bank resources are only interested in making "big", "bulk" deals. We cannot, nor would we approach a bank resource with less than $2,000,000 per transaction. This is why REOs have been a great opportunity for institutional investors, but usually slightly out of the reach of private/individual investors. Our solution for the smaller, private investor is to group their requests for REO listings with other small private investors. WE DO NOT POOL INVESTOR FUNDS. We take 8, $250k investors to meet the minimum of $2M and get the REO listings at that time. This enables the smaller/private investor an opportunity to earn the safe profits as "the big guys"

1) Before becoming a client of PIP-West, we will consult with you and discuss your investment objectives. This includes determining the area you want to purchase property, whether you want PIP-West to just assist in the acquisition, or if you want us to handle the property management, liquidation, maintenance, etc. Once we determine the best course of action for you, you will become a client of PIP-West

2) You will provide PIP-West with a Letter of Intent ("LOI") outlining the terms of your REO request (value, property type, location, etc.), as well as Soft Proof of Funds.
PIP-West will validate your proof of funds and qualify you as a buyer.

4) The bank will research and provide PIP-West/you a listing of properties to choose from (usually about 50). You will have two weeks from the date we/you receive the listing to perform any due diligence on the property. PIP-West handles all due diligence on your behalf, to include physically viewing the property, checking comps, current fair market values, taxes, etc. We report those findings to you and you direct us as to which, if any, properties you wish to purchase.

5) Once you have selected the properties for purchase from your listing, the remaining portion of the transaction works in the same method as it did when you purchased your home. Purchase Agreements/Contracts are signed, the closing attorney is provided with the information and your funds are placed into escrow.
PIP-West will attend the closing on your behalf and provide you with the Warranty Title to the properties following the closing.