Bank owner Reia foreclosures

Atlanta, Georgia
General Landlording & Rental Properties
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Bank owner Reia foreclosures

Gp G.
Investor · Atlanta · Member since 2019 · 532 posts · 89 votes

hi,
I heard bank owner Reia foreclosure are safe without any issues for my long term buy and hold rental purchase at cheaper price. What are pros and cons of this approach. Please advise

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  • Jeremy White
    Member since 2026 · 17 posts · 10 votes
    1d

    REO homes can be a solid way to buy below retail, but they are not issue free. Banks usually sell as is, so inspect carefully and budget extra for repairs and holding time. Work with an agent who has closed REO deals in Atlanta, because bank paperwork and timelines differ from a normal sale. Are you planning to use cash or a loan?

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1d

    What is a REIA foreclosure?

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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 761 posts · 559 votes
    1d

    Short answer: no house is safe just because of where it came from — general education only, not legal advice. A bank-owned house is still an as-is house until you prove otherwise. I run every deal through the same box whether it comes from a bank, a wholesaler, or an auction list: single-family in Memphis under $100K, rehab that gets me to an ARV of $180K to $265K, finished rent that clears the 1% rule, with 3BR+ Section 8 rent at $1,395 to $1,950, and a DSCR refinance at 70 to 80% LTV that works on paper before I buy. Do your own title and condition homework on any foreclosure, because the discount is not real if the house eats it in rehab. The channel does not make the deal. The numbers do.

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  • Richard (Ryszard) Cieplechowicz
    Member since 2026 · 113 posts · 30 votes
    1d

    Plan on the house being worse than the listing photos. Bank-owned means as-is, often with deferred maintenance, sometimes with water damage from sitting vacant. Get a full inspection with the roof, plumbing and HVAC checked, and a sewer scope if it is older. Price your repairs with a contractor bid, not a guess, then add a cushion for the weeks it sits empty during the rehab. Also check the title and any city liens before you close. If the numbers still work after all that, it can be a good buy.

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  • Simon W.Business Member
    Real Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 673 votes
    9h

    Good list on the inspection side. The part I'd add is how the money gets treated after you close, because REO deals blur the line between purchase cost and repair cost.

    If you're fixing something that was already broken when you bought it, like the sewer line, a missing furnace, or a roof the bank never touched, that usually goes into your basis instead of being a repair you write off that year. Same with back taxes or city liens you pay at closing to clear title. So if you buy at $95k and put $28k in to get it rent ready, don't count on a $28k deduction. Most of it gets depreciated over 27.5 years.

    I'd keep the purchase, the title clean-up, and the make-ready costs separate from day one, with invoices that say what was wrong when you got it. That makes the conversation with your CPA a lot shorter.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    7h

    While you don't usually have any deed issues, most banks sell their REO via real estate agents.

    So, not always a great deal.

    Sometimes, you can network your way to the bank's REO manager and buy something before they assign to a selling agent and at least save the agent commission.

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  • Gp G.
    OP
    Investor · Atlanta · Member since 2019 · 532 posts · 89 votes
    5h

    If cheap I can use cash. How to send contractors for rehab estimates as my understanding cannot enter the property before closing?

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  • Jim SternBusiness Member
    Real Estate Agent · ATLANTA Metro and Surrounding Counties · Member since 2025 · 4 posts · 0 votes
    1h

    Hey, bank-owned isn’t the same as safe. It just means a different set of problems.

    The bank sells as-is and will hand you their own addenda. Read those before you get attached to the house. Get a full inspection and a sewer scope on anything older, because vacant REOs hide water damage. Have your closing attorney check title, plus any open code violations or water/sewer balances.

    If you’re financing, talk to your lender before you offer because banks hate their time being wasted.

    Happy to walk through one with you if it helps as we're in the middle of a few of these right now with varies clients on the RE and lending side.

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