Real Estate Owned (REO) property come into existence after the lender fail to sale the house in a foreclosure auction. If unsuccessful to find a buyer the lender or a bank will legally take back the property then find a way to sell the asset as quickly as possible.
Since the bank is liable for taxes of the property it is their interest to instantly get rid of the asset and they are more willing to sell to whatever the minimum value is and this makes good opportunity for investors. Lenders want to liquefy there real estate holdings banks to re-invest revenue into lending business.
REO homes are one of the safest ways to invest a property especially for the novice because it is less risky that the property is free of title liens and other claims. The lender also allow negotiation on costs of rehab, interests, closing points, loan amount, etc. You don’t even have to worry about the eviction process as you sometimes have to deal in the case of foreclosure because it is already taken care of by the bank.
Market an REO purchase is the simplest way for the newbie’s and for the experienced investor because they are easy to find most banks have the listing and they even have departments intended for REO’s. Internet is another good source of bank owned property; investors can search thousands of bank-owned-REO online at dodeals.com.
Though not all REO is a good deal but in general you will discover there is a lot of money to make as long as you know what you are getting into. Similar to any investment scheme, buying these properties is an overall financial plan you have to comprehend the real estate laws, tax ramifications and other financial issues.
The risks and rewards that associate property investing might not just depend on the traits of the house itself, but also the kind of security the home provided to the previous owner’s lender. To keep away from the annoyance of telling foreclosure horror stories in real estate investment circles, an extra mile of meticulous research into a property’s financial history can greatly avoid investment headaches.
Real Estate Investing 