REO Outsourcing
Hello again peoples,
Another phenomenum I have run into is that of REO outsourcing companies (for example - Fidelity National Asset Management Solutions), which are given REO properties immediately after the auction in situations where the bank buys back its own property. In other words, the REO desks at large banks no longer manage properties but instead outsource them to an asset management outfit as soon as possible.
The problem I have encountered is that these outsourcing firms won't deal with private investors. They insist that they have to list with brokers, which makes for a feeding frenzy as soon as the property is listed.
I can see it from the bank's point of view, of course. For a fixed fee, they unload their REO's and all the asset management headaches that used to make negotiating with them possible, and they get the best possible value on the property b/c it's listed again as a retail property. The outsourcing outfit itself has to hold costs down since they are probably operating under a fixed cost contract with the bank, and so they have to make the REO biz into a production line as much as possible. So custom deals with private investors do not make sense to them. Just list and let the brokers do all the work. Sigh. What's an investor to do?
I'm interested in your comments and experience with this situation, and any advice on how to crack the ice with these asset mgmt companies so I can get some discounted property before it gets listed!
Thanks everyone.
-presley
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