REO properties are quickly becoming highly sought after by both novice and seasoned real estate investors. Also known as real estate owned , bank owned , and bank foreclosures , REO s are properties which have been returned to the bank after attempts to sell them through auction have failed.
In the past, buying REO properties was somewhat limited to serious real estate investors. It was one of those hidden gem secrets that average investors weren t privy to. With today s recession and real estate slump, many first time home buyers and novice investors are turning to REO properties in hopes of purchasing a home under market value.
Nearly any type of property can become bank owned including single or multi family dwellings, commercial buildings, farms and vacant land. When property is returned to the bank it is managed through the bank s loss mitigation department. In order to bid on REO property, you will be required to work with the loss mitigator assigned to manage the property.
Many banks publish a list of foreclosure properties for sale directly on their company website. Listings include details about the property including square footage, number of bedrooms and baths, homeowner association fees if applicable, and the name and contact information for the individual handling the sale of the property. In some cases, REO properties are managed directly by the bank loss mitigation department while others are managed by Realtors.
When making an offer on REO properties directly with the bank, be prepared for a lengthy process. It is rare for the Loss Mitigation department or assigned Realtor to accept your first offer. It s important to understand that many real estate owned properties were once foreclosure homes with no equity and an inflated mortgage. More was owed on the property than it was worth, which is usually why it didn t sell at the foreclosure auction. The bank is in business to make money and is going to wheel and deal to obtain the best possible offer.
A common misconception is REO properties are cheap. While it is true you can get a great deal on bank foreclosures, there are also many risks in buying distressed properties. The majority of banks won t even consider an offer less than ninety five percent of the asking price. However, there is one strategy that allows you to purchase REO properties for pennies on the dollar.
Instead of searching for bank REO listings, seek out private real estate investors who purchase bank REO properties. When private investors purchase bank portfolios they are able to buy at wholesale. This can result in savings of 30 to 40 percent.
Since private investors have numerous REO properties to sell, they are eager to pass their savings along to other investors who want to expand their portfolios or individuals who are looking for a good deal for their personal residence.
By working with a private investor who specializes in REO properties you can avoid the counter offer scenario presented by the bank and save a considerable amount of money. It s not uncommon to purchase distressed properties with instant equity of 20 percent or more. Even if you have to invest 10 percent of the purchase price in repairs and renovations, you still walk away with money in your pocket.
Private real estate investors can guide you through the process of investing in REO properties. They can help you locate properties across the nation to build your investment portfolio or assist you in locating a property for your primary residence.
If you are currently investing or considering investing in real estate, now is the time to develop your investment strategy. Experts predict REO properties will generate millions, if not billions, of dollars for savvy real estate investors. Will you be on the receiving end of this upcoming real estate windfall?
Author Resource:-
Simon Volkov is a private investor who specializes in REO and foreclosure homes. He offers a variety of investment properties at wholesale prices through his free Investors List. Obtain instant access to REO properties and real estate investment opportunities at http://www.SimonVolkov.com.
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