REO Basics – The Beginnings

 

REO or ‘Real Estate Owned’ properties offer some of the BEST opportunities to grab a property at a great price. At the tail end of the foreclosure process, REO’s are those properties that failed to sell at auction after they were foreclosed upon.

You should know, most large banks have entire departments dedicated to REO properties.  When properties go to auctions most don’t even get bid on.  That leaves the bank with the properties still on their books.  Even the auction is done they still need to move the property so they turn to the open market.   In many cases the bank will make some minor repairs and clean up any balances the title will be clear.

While it does not happen all the time, you can get REO properties at an amazing discount.  Make sure you do your home before your offer because the bank wants to move the property.  They are not a property management group.  So the property may not be in the best of shape, but if the price fits your budget then you can change that.

 

Its an awesome time to buy real estate!

When you buy property, you do it in hopes that you will be financially better off down the road than you are today.  Usually you have to keep the property for 5-10 years to make a positive number.  Which is the average time most home owners are in their home.  The reason is that transaction costs, repairs, monthly ownership costs higher than comparable rent, and ownership hassles.  So you need to keep it for a while before you an get any money out of your investment.

• So plan on being a long-term holder.
• Only go after what you can truly make work.
• Remember that there are always extra cost when owning as opposed to renting.
• Plan on owning for a long time.

And since you are going to be a long-term holder you shouldn’t bother with the short term.  There will be some ups and downs in the market, but almost always it is worth more in 10 years than it is today.