Banks are mysterious places. The layperson’s initial reaction is to see the manager of their local branch and ask if they have any bank assets, REO properties or non-performing loans, to sell. When you do this, however, the banker will probably look at you like you have two heads.
Lenders generally have centralized operations over the past two or three decades. In the good old days, your local banker had the authority and knowledge to handle pretty much any request. Those days are gone. Local bankers rarely have the authority to waive an overdraft fee let alone sell you an REO property. Who then should you reach out to? The answer is “it depends.”
In smaller, community banks, you’ll be able to locate the bank president or chief credit officer without much trouble. These officers will typically have the authority to help. In a big bank, however, non-performing assets are typically transferred to a special department fittingly named “Special Assets.” These departments are normally manned by experienced bankers that are charged with working through troubled loans and REO property on behalf of the bank. Keep in mind, however, that their phones constantly ring with novice but arrogant real estate investors that tell them that they are going to make all their dreams come true by purchasing the bank’s assets at 30 cents on the dollar. Approaching a banker with this sort of attitude will be met with a quick “click” on the other end of the phone.
It is possible to develop a strong relationship with a special assets offer, but only if you make yourself a valued outlet for them. Making unreasonable offers on bank assets will not endear you to the officer. The officer has a job to do and if they know that you can be a reasonable, trusted outlet to sell assets to, they will call you when they have an asset to move. Banks can take a haircut on an asset to only a point. Understanding what a bank can and can’t do is the first step to building a great network of bank lenders to provide you with assets for years to come.