REO's vs. Short Sales

[Will Barnard]

The markets are constantly changing and vary in different parts of the country and in different parts of each state for that matter. I currently am focused on REO investing, mostly in CA, and would like to start a discussion with other investors, both seasoned and newbies, of which they feel is the better strategy in each of YOUR markets (short sales or REO's)

I have found that short sale investing (at least in CA) has become too difficult due to several factors, one being the time it takes to complete a transaction, and a second with the many incompetant agents involved in the transactions.(not all factors listed here)

What factors are driving your market place which in turn determine which strategy you implement and why?? :lol:

[Justin S.]

Will-

Good Topic.

I like short sales for the following reasons in Arizona.

1. No competition once I sign the buyer. I am the only buyer and in many cases no one knows the seller is selling except me.

2. Tons of competition when I'm selling. I'm getting my list prices bid up and most of them are cash offers.

3. I can control tons of properties with virtually no out of pocket costs. My expenses are direct mailing, gas, and time. I do not place money in escrow and all my expenses are paid on the B-C side.

4. Once you get over the 3 month waiting hump for your first short sales, and as long as you keep your pipeline full, you can close more deals this way. It just a take that first waiting period that discourage others.

I don't like short sales because:
1. The waiting period.
2. The deal can fall apart any second.
3. I like dealing with people, but homeowners are distressed and sometimes that back fires.

If I had extra cash and an "in" to REO's, I would probably do some REO deals. But, the Phoenix market is hot right now and an REO will get 10-12 offers the first day its on the market.