REO Properties - Tips and Suggestions
Lots of people are talking about REO properties; but do you know what they are referring to? When a bank forecloses on a property, they don't want it.
They put these foreclosed properties in a public auction; the ones that don't sell are referred to as REO properties.
REO properties can consist of anything from apartment buildings to vacant land.
Banks don't deal in the real estate business; they only want to get cash.
Because they only want to sell the property as quickly as possible, you can usually find REO properties listed on their website, along with the name of the loss mitigator who's managing the sale of that property.
The loss mitigator is similar to a real estate agent; you will need to contact him or her to set up a viewing, and make an offer if you're interested.
With most investment property purchases, the process goes smoothly and closes quickly.
With REO properties, however, coming to an agreement on a price can take a while.
While it's true that the bank wants to get rid of the properties, they're still a business, and want to make a profit.
Be prepared for some negotiations; there may be a lot of back and forth number swapping before an agreement is reached.
Because of the haggling, and the fact that the process can often be drawn out indefinitely, many investors choose to buy from private investors.
Not only is this option often simpler, you can also sometimes get even better deals on investment properties.
The private investors you want to look for purchase REO properties in bulk from banks; they buy the properties at wholesale prices from the banks, then sell them at low prices to other investors.
You can often find deals up to 30% lower than the market value.
The goal of getting the lowest price isn't only for the purpose of profit; REO properties are often in desperate need of costly repairs and pricey renovations.
Homeowners may have done damage to the property upon hearing that the house was being foreclosed on.
Your goal should be to purchase the property, fix it up, and get it ready for occupancy all without losing too much money.
The only thing wrong with purchasing from either a bank or a private investor is that you don't have anyone to offer impartial advice.
Finding an experienced real estate investment broker is an effective way to find the best investment properties and to get all of your questions answered objectively.
They put these foreclosed properties in a public auction; the ones that don't sell are referred to as REO properties.
REO properties can consist of anything from apartment buildings to vacant land.
Banks don't deal in the real estate business; they only want to get cash.
Because they only want to sell the property as quickly as possible, you can usually find REO properties listed on their website, along with the name of the loss mitigator who's managing the sale of that property.
The loss mitigator is similar to a real estate agent; you will need to contact him or her to set up a viewing, and make an offer if you're interested.
With most investment property purchases, the process goes smoothly and closes quickly.
With REO properties, however, coming to an agreement on a price can take a while.
While it's true that the bank wants to get rid of the properties, they're still a business, and want to make a profit.
Be prepared for some negotiations; there may be a lot of back and forth number swapping before an agreement is reached.
Because of the haggling, and the fact that the process can often be drawn out indefinitely, many investors choose to buy from private investors.
Not only is this option often simpler, you can also sometimes get even better deals on investment properties.
The private investors you want to look for purchase REO properties in bulk from banks; they buy the properties at wholesale prices from the banks, then sell them at low prices to other investors.
You can often find deals up to 30% lower than the market value.
The goal of getting the lowest price isn't only for the purpose of profit; REO properties are often in desperate need of costly repairs and pricey renovations.
Homeowners may have done damage to the property upon hearing that the house was being foreclosed on.
Your goal should be to purchase the property, fix it up, and get it ready for occupancy all without losing too much money.
The only thing wrong with purchasing from either a bank or a private investor is that you don't have anyone to offer impartial advice.
Finding an experienced real estate investment broker is an effective way to find the best investment properties and to get all of your questions answered objectively.
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