Cash is King and the best deals will always be had by those with the means to act quickly and decisively.

There are some media reports talking about some very well funded groups taking advantage of the housing market problems, especially in Florida. Many of these reports try to portray these groups as predatory and swooping in to snap up bargains at the expense of the poor, poor homeowner.

I guess I should expect no less from the drive-by media.

But, there is a bigger issue here affecting any small investor who has their sights on snagging some of the bargains around.

These groups are very well funded and they are able to work some amazing deals on REOs because they are willing and able to take packages and swallow them whole. They are often buying for as little as 20 to 30 cents on the dollar in large volume. Many are taking entire floors of condo projects and sometimes the entire building!

It is insane to think a small investor can compete against them.

So, what do you do when talking to the banks about REOs and shortsales is a total waste of time?

There is a back door.

It is estimated that approximately 10 to 15% of the problem loans are held by individuals or small groups and good area is small banks and credit unions.

But wait, didn’t I just write that talking to the lenders was a waste of time? Yes, if you are talking REOs or short sales.

But, what if you are willing to take their under performing or defaulted loan off their hands?

You could easily expect a 40 to 50% discount or more! Then, you can either work with the borrower to bring things current. That would increase the value of the loan and you could then sell a performing note after a few months while collecting the monthly payment until it is sold.

Or, if the borrower doesn’t bring things current, you then foreclose and have your own REO!

Either way, your ROI is great and the competition you will face is much less.

Let the sharks fight among themselves while you quietly complete deal after deal of your choosing.