Advantages of Buying REO Properties - Real Estate Owned Properties -
Author: Joshua Dorkin • URL: http://www.biggerpockets.com/January 8th, 2007 •
Many real estate investors focus on buying foreclosures as a means to locate properties with a lot of equity at a discounted price. I wanted to share some information on another strategy - Buying REO Properties. REOs or Real Estate Owned Properties are properties owned by a bank. These properties have gone through the foreclosure process, but no one successfully bid on them for purchase. There are many advantages to buying Bank REOs.
Advantages of Buying Bank REO Properties
- All liens against the property are removed once it becomes an REO, and taxes are paid.
- Unlike properties at foreclosure auction, REOs can be inspected prior to contract, and are listed with real estate agents.
- While many foreclosures are often in deplorable condition, REOs are typically restored to at least a readily salable condition by the lending bank.
- The bank or lending institution that owns the property will often offer financing with better deals than they would offer on traditional properties.
- The bank or lender that owns the property will often provide an allowance for certain repairs.
- You can save money in your title search if you use the same title company that the lender used during foreclosure. They will often discount the cost up to as much as 100%!
- REO properties are usually listed on your local MLS (multiple listing service), or can be located by going directly to your local REO bank’s website.
- REOs will often times include appliances
- While in hot markets, you may not see a difference in price between an REO and a typical property, during slower markets, you can pick up an REO at discounts to the property’s actual value.
Note that lenders and banks do not like holding REOs on the books, and try to get rid of these as quickly as possible.
For more information on REOs and foreclosures, visit:
The Foreclosure Process
Where to Find Foreclosures
Bank REO Listings
Find Pre-Foreclosures
Government Owned Foreclosures
Asset Management REO companies
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Joshua Dorkin
Charles Feldman
Ted Karsch.
Richard Warren
I was just writing my Real Estate goal post(better late than never) and had started to put in as one of my goals about buying foreclosures. This gives me another option, thanks.
Great post, REO is a great way to find a good deal for rehab projects and banks are easier to deal with than stressed out people who are going through a foreclosure. Another way to find REO’s are to call title companies and ask them what REOs they have been involved with in the past month.
Thanks Jeff. Great suggestion.
[...] Joshua Dorkin has some advice for real estate investors and entrepreneurs - buy real estate owned properties. These are properties owned by the bank that have gone through the foreclosure process. [...]
[...] Joshua Dorkin presents Advantages of Buying REO Properties - Real Estate Owned Properties - posted at Real Estate Investing For Real. [...]
[...] Joshua Dorkin presents Advantages of Buying REO Properties - Real Estate Owned Properties - posted at Real Estate Investing For Real. [...]
REOs will be a major thing in late 2007 and 2008 in California. With so many speculators buying properties believing that appreciation was forever locked in and mortgaging themselves with suicide loans, we will see many properties coming back to the lending institution or banks.
Great to learn this information for cash will be king and some great deals will be found in the next few years.
[...] The Festival of Investing - January 9, 2007 hosted at Investing World Today gives us The Advantages of Buying REO Properties. This post sheds some light on Real Estate Owned Properties, which are “owned by the bank and have gone through the foreclosure process, but no one successfully bid on them for purchase.” [...]
[...] Joshua Dorkin’s “Advantage of Buying REO Properties” on Real Estate Investing for Real. [...]
[...] If a property doesn’t sell at auction then the mortgage holder, usually a bank, is stuck with the property. The property is now known an REO, or Real Estate Owned. I found a great article that I’d like to share about “The Advantages of Buying REO Properties - Real Estate Owned Properties.” [...]
i am looking for blocks from 5-10 million every week
chriscroce@comcast.net
Well Chris . . . That’s a nice introduction. I guess you just cut right to business. Why should someone deliver such a package to you versus someone else?
I’ve been interested in REO properties for sometime now and I finally decided that it was time to take action. Thanks for the helpful information and inspiring me to get involved.
I am looking for some guidance. I have a Investor looking to purchase 25 million In bank Oreos in the South Florida region commercial or residential.
REO DEALS, Builder Blow Outs, Reant To Own, Notes, Wholesale Real estate, Loans, Hard Money, Owner Financing, REO Portfolios.
Calling title companies to me is the best way to go when dealing with REO property. And with the housing crisis still in effect, REOs will be on alot of agents radar.
I am in the Detroit market and you can close your eyes and throw a rock and get a great deal now. I rehabed over 40 houses last year and sold them to first time home buyers and other investors but because of the way the market turned this year I have been wholesaling to Investors who want to be landlords.
Hello. I have a question about this article. Will you please shoot me an Email at your convenience. Thank you.
With the fluctuation in the market over the next few years, I think a lot of folks who get wise to this sort of thing will stand to make a lot of money. Watching trends on this sort of stuff right now
[...] on homes, duplexes, and apartments in virtually all Orange County cities. Particularly in the REO and Short Sale markets. We’re going to take this one step at a time, so we’ll start [...]
what is the best strategy to getting a single REO… the ones out in Cali are aggressively priced, and move quickly. Are agents double dipping by getting the seller & buyer commissions? Are there any rules they need to follow (since seller isn’t that interested in getting the highest price)?