Bank Owned Home/Auction Property

[Kris Hargraves]

Hey BP community,

I’m new to real estate investing and currently exploring different entry points. Lately, I’ve been diving into bank-owned (REO) and auction properties—mostly because of the lower upfront costs and the potential to add value. But I’m not naive to the risks.

Here’s what’s on my radar so far:

• REOs are sold as-is, but you usually get a clean title and a chance to inspect before closing.
• Auctions? They sound exciting… but also stressful. Competitive bidding, limited due diligence, and often cash-only closings.
• Many of these properties need serious work—which I’m okay with—but I want to avoid buying someone else’s nightmare.

I’d love to hear from those with experience:

• What are the biggest pros and cons of REO vs auction?
• Any due diligence tips you wish you knew when starting out?
• Is this a solid path for a first deal—or should new investors stick with more traditional routes?

Appreciate any advice, insights, or cautionary tales. Trying to be bold, not reckless. 😅

Thanks in advance!

— Rookie Investor, hungry to learn

[Chris Seveney]

Pros - can find deals

cons - can lose big money if overpay

while lower cost to acquire typically they require significant renovation costs