Buying REO from Special Servicers

Some experience with this. Yes, they do market competitively since it's their job to get highest value. That said, It can't hurt to approach them about buying the note before they foreclose.

REfinance007:

Does anyone have experience buying REO from CMBS special servicers? Do servicers always hire brokers to sell their REO? I'm looking at buying a couple of assets that one servicer is about to foreclose on and I'd like to make an offer before they hire an investment sales broker and take the assets to market. Can anyone with experience working for a servicer or buying REO from a servicer comment on the feasibility of this strategy?

A mix of both, it never hurts to setup a meeting to land an off-market deal. In my experience, the smaller the asset the more likely special servicers are willing to entertain off-market offers

There are a lot of regulatory hurdles you need to worry about in that biz. If you're doing 'off market' deals as a servicer, imagine the headache you can cause yourself if some bond holders decide to sue bc they think you sold too fast, or there was more value than you sold for, etc etc.

Far easier to get it in with ppl working in the distressed portfolios at banks/lenders. Especially smaller banks, not Boa or JPM.

I have experience with this and I think it is definitely worthwhile to pursue the opportunity if you can find it. Having said that, most deals worth doing are controlled by the Controlling Class Bondholder or special servicer, so you would have to approach them about buying the property before its marketed by a broker.