Bulk REO Deals from Fannie Mae

To succeed as a bulk REO investor, access to capital and consistent supply of REO deals are a must. Establishing good working with well capitalized investment firms, REO asset management companies and REO bank departments is necessary to find and close deals on time. Just like any other real estate endeavour, success in bulk REO investing of Fannie Mae homes can be achieved through proper training, planning and analysis.

Investors interested in acquiring a large number of repossessed REO homes should consider buying Fannie Mae & Freddie Mac bulk REO tapes. REO properties that make up the components of Fannie Mae bulk REO package can be found in any area where the agency has a large number of unsold repo homes in its inventory. Bulk REO tapes can be customized based on geographical area, property price and condition to appeal to the preferences of investors. Homes that need minor repairs to ones that need major and substantial renovation and rehab work can also be bought through Fannie Mae owned REO home listings.

To succeed in bulk REO investing, an investor needs to keep the following points in mind.

  • It’s not easy to become an eligible investor for receiving bulk REO tapes from Fannie Mae.
  • Prior investment experience and access to large amount of capital is required to get approved. Even smaller deals need funding in excess of seven figures.
  • Investors employing their own capital with no need for outside investment or financing can close on Fannie Mae REO deals quickly. Doing this also allows an investor to profit significantly as Fannie Mae offers large discounts off the principal value on bulk tapes.

Investors are increasingly looking to invest in bulk REO deals as they are often priced well below the market value of individual properties that make up the tapes. A discount of 50-60 cents on the dollar is not uncommon among FNMA bulk REO deals. As the deals need huge capital, the interested investors need to get approved by Fannie Mae REO department before they can expect to receive the bulk reo home listings. Letter of intent and proof of funds are the two pre-requisite documents required by FNMA to determine the eligibility of a potential bulk buyer.

Upon receiving the listings of a bulk reo deal from Fannie Mae, an investor will have a time window of 7-10 days to do proper research and assessment of the condition and market value of the bulk property portfolio. If a certain number of properties don’t match the buyer’s preferences, Fannie Mae will often be willing to replace them with other homes from its listings. The bulk of the homes that make up a tape are single-family residential homes, while commercial and multi-family properties are also present in smaller numbers. A custom bulk REO package with a specific geographic preference, price or condition can be designed by Fannie Mae REO department.

Lately, due to the rising tide of repossessed homes joining the REO inventory at Fannie Mae and other large entities, a lot of attention has been focused towards investing in Bulk REOs. Investors with the right capital and contacts can make substantial profits in a short period of time by buying and selling bulk REO homes. A number of properties that were repossessed by FNMA are grouped together and offered as a bulk package to potential investors.