How to acquire REO's as investment properties

[Dakoda Spencer]

Hey all, I have a simple question. I want to purchase an REO as an investment property but I'm not sure of the process. Do I need to be sure to tell the bank that it's going to be a rental or does it matter? I plan on putting the 20% down on it to acquire it. Please answer for both REO's and normal houses on the market. I live in a small town and most of the renters will most likely be college students. I have good credit score and a couple thousand to put down. I haven't bought a house for myself yet so the actual buying property process confuses me just a tad for now. And please tell me if an REO is much different than a traditional house on the market in terms of the buying process. Most of the houses I look at aren't bank owned but this one happens to be. Thanks guys and gals, -Dakoda

[Steve Babiak]

Originally posted by @Account Closed:

@Dakoda Spencer Banks sell REOs to cash buyers and never heard of a bank financing an REO, and you will need to make your offer through the realtor the bank is using. Good luck.

I have seen the bank that owned the REO give a buyer the loan to buy an REO exactly once. It was a smaller local bank that did portfolio loans, the loan that was foreclosed was one of their portfolio loans, the building had six units (so no conventional loan products for this), and the buyer was willing to pay more if they funded it. So basically the bank turned their non-performing loan into a performing loan by doing that. It sure seems to make sense for a banks to do that, but in spite of that it does not appear to be so common ...