subject: So You Want to Buy REO [print this page] I am often asked by those seeking to get involved in REO (real estate owned) how do I purchase REO properties?
Buying REO can be lucrative but can also be difficult to find the right product
There are two main ways one can purchase REO. First is to buy properties one at a time through realtors who have been assigned these properties by banks. The second method is to buy in bulk, meaning you are buying a group of properties at a time directly from a bank or a servicing company.
Let's start with buying "one offs" as we call them, or direct from realtors. This can be done by anyone with money, and information on these homes is easy to access on realtor.com or the individual bank web sites which will then tell you who the realtor is that is in charge of selling the property.
The advantages of this are that you will get a clean title (free of liens and back taxes) and the property will also be somewhat cheaper than similar homes in the area. The disadvantages are that you will be competing with local investor and buyers and you will be paying more than if you bought it as part of a bulk sale.
The other method is to purchase REO homes in a bulk sale. A bulk sale means you are buying homes in multiples at the same time. A typical bulk sale may have a few homes or hundreds. In a bulk sale you are buying homes scattered throughout the country so you won't have the luxury of buying only in your area of choice. These properties typically come without any representations of title and often have back taxes and liens attached to them.
Assuming you decide you are ready to buy in bulk, you still have a long road ahead of you. Finding the people in the banks that handle the selling of them and getting on their bulk sales lists is a major undertaking onto itself. Often times you will be asked to show proof of funds and you will be vetted so that the bank reps will know you are for real. You can also buy from other investors second hand who have bought from banks, but that is a dangerous game as you are getting marked up properties and often times other peoples junk.
So for those seeking to get involved in REO Investment just getting in the door and getting the right product can be a challenge, but don't forget once you have the product you have to know what to do with it!
So You Want to Buy REO
By: Corwin Smith
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