Where do you go to find REO's?

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Where do you go to find REO's?

Dave Kennedy

Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes

Is there a good database or do you just hop from each banks website and search for properties?

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J ScottPro Member

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Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes

17y

Almost all REOs are listed on the MLS. So, if you can get access to the MLS, that's your best bet. If not, find a realtor and ask them to send you the REOs that fit your criteria. Alternatively, you can use any of the vast number of Internet sites that provide access to most MLS data.

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Chris T.
Wholesaler · Amarillo, TX · Member since 2008 · 369 posts · 75 votes
17y
Here's where I go.

http://www.biggerpockets.com/bank-reo.html
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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
17y
Almost all REOs are listed on the MLS. So, if you can get access to the MLS, that's your best bet. If not, find a realtor and ask them to send you the REOs that fit your criteria. Alternatively, you can use any of the vast number of Internet sites that provide access to most MLS data.
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Dave Kennedy
OP
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
17y
Interesting I'll keep this in mind.

Anyone else have input? MLS the way to go for REO's?
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James Hiddle
Altus, OK · Member since 2008 · 2k+ posts · 690 votes
17y
Bank websites like BOA and Fannie/Freddy have REO's listed.
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Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
17y
The ORIGINAL Bank REO Directory:
http://www.biggerpockets.com/bank-reo.html

Lots of copycats who take our material, but this is the orig!
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Dave Kennedy
OP
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
17y
Wow thanks Josh! Nail on head...this was exactly the type of list I was looking for. I don't know how I overlooked that here.
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Dave Kennedy
OP
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
17y
Another question.....Can you finance an REO or does it need to be all cash?

I'm thinking that a bank would want cash and not risk taking a loan out on a place that is already bank owned.
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John Andre
Real Estate Investor · Mission Viejo, Cape Coral, CA · Member since 2008 · 218 posts · 24 votes
17y
If the REO is listed with an agent and on the MLS, there will be time to put a loan in place. If it a bulk sale from the bank, no there will not be time for a loan. Proof of funds is required up front.
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Ben Jamin
Homeowner · Centennial · Member since 2009 · 2 posts · 0 votes
17y
Very helpful information for a newbie on the site. Saw the article in the paper, joined up and so far i am impressed !
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Dave Kennedy
OP
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
17y
Another question.

An agent said that the bank has restrictions on getting a contractor or inspector to look at the property? Does this mean I can't have an inspection contigency?

Is it possible for you to get your contractor and inspector in the property before you put an offer in? This way you know where you stand before the offer goes in. I'd hate to get it under contract and then be bound by the banks rules.
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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
17y
Dave,

Once you put the home under contract you will have access into the home. You can then get your contractors or anyone you want into the home. I would never buy with out having my team inside the home. Actually, You need to get them all inside the home before you ever put an offer on the home. Get all your numbers figured out first then put in an offer.

Also, you will not be able o get any financing on a bank foreclosure. Banks do not give loans on homes that need repairs like foreclosures. You will need cash or a hard money loan.
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Dave Kennedy
OP
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
17y
Curt,

Thanks for the reply. There is a bank owned property on the MLS and I called an agent they said the bank won't allow for inspection once under contract. Do you think the agent is mistaken?

That seems crazy. Who on earth would by without an inspection?
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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
They a bank. They are (apparently) staffed by idiots. They can do whatever they want. But it makes no sense at all to say no inspections and no access after a contract. At the very least an appraiser is going to need to be in there. Maybe they know its such a junker nobody will buy it after an appraisal or inspection.

If you know what you're doing, you can certainly buy without an inspection. Most inspections point out a bunch of obvious stuff anyway. What you're looking for with an inspection is the big problem you didn't see on your own.

If you like this property, I'd put in an offer and include an inspection contingency. It is customary for banks to allow inspections.
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Dave Kennedy
OP
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
17y
Interesting Jon. I'll see if I can get a "showing" and bring an inspector through. The bank doesn't need to know he's an inspector...lol.

I did seem a bit odd that the bank requested no inspections. I guess a well seasoned investor that knows how to throughly inspect a property himself would be a buyer here.
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Heather Pelletier
MA · Member since 2008 · 199 posts · 1 vote
17y
"Also, you will not be able o get any financing on a bank foreclosure. Banks do not give loans on homes that need repairs like foreclosures."

Acutually, this is not true. As far as I know you are able to finance a REO if the furnace is in working order and the house is considered habitable. We have financed a REO before and are about to do it again. Just wanted to clarify.
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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
17y
First, as Heather pointed out, it's not true that you can't get financing for an REO. In fact, you can get any type of financing you want (and can get). The banks may not consider your offer as seriously if you are getting conventional financing, but there is absolutely no rule that states that you can't get a traditional loan against an REO.

As for inspecting the property, my guess is that the bank is stipulating that you have no "due diligence period" after the contract is signed. This means that once the contract is binding (all parties have signed it), you don't have any time period in which you can back out and get your deposit back.

But, the bank certainly shouldn't limit your ability to enter the property as much as is reasonably needed, for things like inspections, contractor estimates, appraisals, etc.

In fact, I'd be surprised if the bank even knew that you were entering the property; it's normally the job of the listing agent to grant you access, though your agent should be able to do so as well. Especially since all REO properties are vacant, so you don't have to worry about disturbing the home-owner.

My suggestion is to tell your agent flat-out that you expect to have access to the property as much as need-be. If he/she can't ensure that will happen, find another agent.

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Dave Kennedy
OP
Real Estate Investor · Georgetown, MA · Member since 2008 · 250 posts · 6 votes
17y
J Scott,

I think you summed it up well and I believe you are dead on with your opinion about the banks stipulation about the DD period.

The agent kept repeating that the bank would not allow an inspection...etc.

I'm pretty sure she didn't understand exactly what the bank was saying.

I'll be calling again tomorrow to clarify and find another agent if need be.

Thanks to everyone in this thread for their input.
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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
Maybe the agent is confusing "as is" for "no inspection". That's certainly an incorrect interpretation. Not to mention my experience is that banks will actually negotiation based on the outcome of the inspection.
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Kenny Sumrein
Real Estate Investor · Brooklyn, NY · Member since 2009 · 24 posts · 4 votes
17y
Your right as a buyer should be able to get an inspection if you can't inspect the property how the heck do you know what your buying?
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Mike Macey
Real Estate Coach · Centennial, CO · Member since 2008 · 31 posts · 2 votes
17y
Realtors and MLS are not the only sources for buying REO's. You can also find asset managers who have multi bank and/or private lender relationships. They may sell one at a time or packaged. Good asset managers make subjective evaluations and grade bank packages for disposition. This provides specific products for full rehabbers, fix and flippers, rent ready, owner occupied, etc.

You can buy CD's, go to seminars, and spend countless hours chasing REO's while the experienced professionals have the contacts locked up. Or, find an asset manager to get the result you are looking for. If you like education, preparation, and the hunt.......you are a REO - DIYer. If you don't have the time or inclination to become a DIYer, consider finding an asset manager or Realtor to get your exactly what you want.

There are thousands of electric and battery operated drills sold every year. How many buyers wanted to buy a drill? Probably few! Most wanted a hole. Are you looking for the house or are you looking for the result such as ROI, cash-on-cash return, long term or short term hold?

Consider an REO as a financial model and not a house. take the emotion out of buying an REO. Would you rather buy one $300k house with $1,800 - $2,200 monthly rent and an $1,800 month mortgage to pay every month it sits empty.....or.....ten $30k houses with a monthly cash flow of $450 x 10 = $4,500? Understand your investment plan and invest for the results. Seek mentors and read the forums and blogs on BiggerPockets.

You can find asset managers and resources at Bigger Pockets "Foreclosure Resources" http://www.biggerpockets.com/foreclosed_property_management.html.

Asset managers work with owners of REO's and foreclosed properties such as banks, hedge funds, and private investors. Many non traditional owner/lenders can provide 1 year short term bridge loans at 80% LTV and permanent loans at 70% LTV. Some will finance foreign nationals.

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Jacqueline M.
Involved In Real Estate · Fairburn, GA · Member since 2008 · 1 post · 0 votes
17y
Banks does allow financing on foreclosed property that needs repair. I closed on a deal last month and I'll be closing another one April 28.
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Kevin Yeats
Lender · Fort Pierce, FL · Member since 2009 · 825 posts · 486 votes
17y
Well put Mr. Macey,

As Stephen Covey extols "Begin with the end in mind."
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Justin Roney
Real Estate Investor · Nashville, TN · Member since 2010 · 7 posts · 0 votes
15y
Great quality info everyone!! Very impressed with this site so far!
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DAVE Cutler
Real Estate Investor · Peabody, MA · Member since 2010 · 8 posts · 0 votes
15y
Originally posted by J Scott:
Especially since all REO properties are vacant, so you don't have to worry about disturbing the home-owner.

Just to point out for future readers of this thread that not all REO properties are vacant. I have seen REO's that still have the past owners or tenants still occupying the property and it is up to the buyer to start and/or complete the eviction process. Not common but can happen!

Regarding http://www.biggerpockets.com/bank-reo.html,
It is my expereince that many of these banks/lenders always list properties with listing agents and they do eventually end up on MLS and that is really the only way to put an offer in on them.

Mike made a good point about Asset management companies and I will look into that.

Any specific banks anyone has worked with or contacted that have REO Asset team that can negotiate sales on any properties they own directly before goint to an agent and MLS?

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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
15y
Originally posted by DAVE Cutler:

Just to point out for future readers of this thread that not all REO properties are vacant. I have seen REO's that still have the past owners or tenants still occupying the property and it is up to the buyer to start and/or complete the eviction process. Not common but can happen!

It's funny...when I wrote that a year and a half ago, it was true, but as you pointed out, this has changed over the past year. About 5% of the time, I'll see REOs that either have the owner still living there or a tenant...

Regarding http://www.biggerpockets.com/bank-reo.html,
It is my expereince that many of these banks/lenders always list properties with listing agents and they do eventually end up on MLS and that is really the only way to put an offer in on them.

Any specific banks anyone has worked with or contacted that have REO Asset team that can negotiate sales on any properties they own directly before goint to an agent and MLS?

Smaller banks often don't list their inventory with agents or on the MLS. Check their websites or go right to the bank and ask to speak with their asset manager...

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