« Proof of Funds and Bulk Myth Dispelled
What is the state of the bulk reo industry in 2010
Category: News
Let’s get something straight to begin with. There is NO HIDDEN or Shadow Inventory.
I know many of you keep hearing about the second wave of foreclosures is coming! You are probably thinking that because you are having difficulty in obtaining HUGE bulk bank reo tapes, that the Banks must be holding or hoarding houses back from the market or that perhaps they are about to flood the market with thousands of properties.
We’ve been hearing that for over a year now. I have never bought into it, because as I have always stated, is that the market can handle more inventory than most would think There is so much pent up demand it’s crazy.
The assumption I’ve never challenged, until now, is that these foreclosures even exist! Take a look at the latest numbers crunched over at Foreclosure Radar. I don’t know how you can argue with the data, the sales volume has been so great it is outpacing the numbers of foreclosures hitting the market. We have been saying that for over a year!
It is important to point out that there are massive numbers of defaults and foreclosure sales that are "hung up". It’s an absolutely huge number, but still, there’s not one person I’ve spoken to that believes that there are masses of foreclosures post sale, sitting inactive that are not even being placed on the market.
The crazy thing is that every investor buyer wants to believe that they can purchase bulk SFR tapes in CA, NV, AZ at 50-70 cents on the dollar. They are so motivated at the prospect that they are willing to treasure hunt for inventory that does NOT exist.
The reality is that our company is calling the banks every single day and I can tell you from experience that nothing exists in CA, AZ, NV in bulk SFR tapes at discount prices (we have strong relationships with almost all the mid sized institutions).
The banks at best only have 1-5 REO properties at a time and they are unloading those via realtors and brokers at NO discount. Asset managers are telling us that most of their bank owned properties are actually selling at full market value without any need to discount! The markets are moving in these states!
The inventory in the Southwest has dried up and the demand is obviously heading east across the Midwest. I can tell you that demand FAR exceeds supply so we only expect bulk SFR tapes in the Midwest and east to last another 12-24 months. The inventory that is available will NEVER be cheaper than it is now.
I am sure many of you have seen large, pennies on the dollar California Single Family Residential "tapes" flying around the internet, but I can assure you that it is NOT authentic product.
Many buyers are frustrated that they can't find anything and it's simply because it's GONE. Anyone telling you that they have $200M – $1B in bulk single family homes at thirty (30) cents on the dollar is a joker or a part of a daisy chain of jokers….
So, check out the bulk market for yourself- the implications are huge for investors, because investors who are waiting to buy may really, really miss the boat….waiting is harmful to your wealth!
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- Gary Martin, Allied Investments
- Mr. Ronald Bayer - First
Financial Investing 
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Mr. David Byrns - President - REF4 Funds.
- Debra Tillman 
M. Cameron - Charlotte NC
